Sample Business Paper on Executive Compensation Package

  1. Introduction
  2. Understanding the various aspects of executive compensation package including its definition.
  3. Real-life situation on the contrasting views on executive pay package. This should include the pattern used for executive incentives and package while considering the economic theory in practice.
  4. The context of executive compensation package: Who is responsible for setting up an executive pay?
  5. A brief overview of the theory of executive compensation. This should include an explanation on how organizations seek to embrace an efficient compensation model to retain managers, executives and CEOs.
  6. Explanation on how shareholders design an optimal compensation package while considering their mutual interests. This should include an explanation on how manager opportunism can be avoided.
  7. Components of executive pay.
  8. Basic pay
  9. Annual Bonus Plan
  10. Restricted Stock
  11. Long term incentives
  12. Retirement plans
  13. How CEO compensation is distributed in various firms by 2019

Reference: Grover, J. (2017). Executive Compensation. Detroit: Greenhaven Press.

This reference provides a detailed analysis on executive incentives and other types of benefits. Consequently, it will be beneficial in explaining the various components of executive pay

  • Governance of executive compensation package
  1. Explanation of governance in terms of the contract theory.
  2. The impact of the CEO controlling the contracting process and explanation on how this is a major challenge for stakeholders. This should include an explanation on the outcomes of implicit or explicit contracts offered to CEOs.

Reference: Harris, D. M. (2018). Contemporary issues in incentives. Chicago, IL: Economic                        Administration Press.

Fletcher, A., et al. (2016). “Mapping stakeholder perceptions for a third sector organization.” in: Journal of Intellectual Capital 4(4): 505 – 527.

These references give an insight on the emerging issues on the governance of executive incentives and clearly explain the contract theory. Hence it will used to explain the contracting process and its impact on CEOs.  The text by Fletcher will be used to explain the various stakeholder challenges.

  1. Compensation Committees and their influence on executive compensation package.
  2. Explanation on the efficiency of compensation committees using the managerial power theory. The section should provide a clear evaluation on the effectiveness of a compensation committee.
  3. Highlight of studies that covered the effectiveness of compensation committees and the underlying agency problems involved.
  4. An overview of pay for performance structure which is a common recommendation by most compensation committees.
  5. An overview of some of the conflicting incentives aligned to CEOs. This should include an explanation on the influence of affiliated directors.
  6. Consequences of providing overwhelming incentives.

Reference: Turner, J. R., et al. (2018). The manager as a change agent. London, McGraw-Hill Publishing Co.

            This reference clearly explains the compensation committees; hence, it will be essential in covering the section on the performance of the committees.

  1. Corporate governance and its role in compensation package.
  2. Relationship between corporate governance and economic performance.
  3. Way of ensuring that compensation is not corrupted and its importance.

Reference: Mitchell, R. K. (2017). “Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What really Counts.” in: Academy of Management Review 22(4): 853 – 888.

This reference will be vital in explaining how corporate governance is an important aspect to stakeholders and it also gives an insight on some of the preferences that stakeholders consider.

  1. Conclusion.
  2. Summary of main ideas in the research paper and recommendations for further research.

 

 

References

Grover, J. (2017). Executive Compensation. Detroit: Greenhaven Press.

Harris, D. M. (2018). Contemporary issues in incentives. Chicago, IL: Economic                                       Administration Press.

Fletcher, A., et al. (2016). “Mapping stakeholder perceptions for a third sector organization.” in: Journal of Intellectual Capital 4(4): 505 – 527.

Mitchell, R. K. (2017). “Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What really Counts.” in: Academy of Management Review 22(4): 853 – 888.

Turner, J. R., et al. (2018). The manager as a change agent. London, McGraw-Hill Publishing Co.