Question

1. What is the biggest problem with Executive compensation? a. Is this a problem that can be solved by the BoD, or would an outside firm be better able to solve it?

2. How can companies ensure that their shareholders needs are being met?

3. Given how much control the CEO has over the BoD, is it possible for executive compensation to ever be reduced? If so, how?

Answer 1

1 Regulatory requirement is the biggest Problem in executive compensation there is dragisticly changes in time to time Like Bonus Taxation and Reglatory compliance.

a.Yes An outside firm will be better to solve this problem.

2. Having made an investment in a business, shareholders are concerned with assessing the profitability of their investment. The decisions made by managers determine what they can expect both in terms of dividends, or profits, and capital growth, both of which are reflected through the share price. if share price is increasing and company is making good profit and giving dividend means Shareholders need are meet.

3. A chief executive officer (CEO) is the highest-ranking executive in a company, and their primary responsibilities include making major corporate decisions, managing the overall operations and resources of a company, and acting as the main point of communication between the board of directors and corporate operations.

Boards should support the CEO in implementing board decisions, such as awarding or ending contracts. At times, the CEO may need to ask the board for intervention or support. CEO’s may need the board to intervene with management in ways that help him raise performance. Boards may also support CEO’s by using their networks within the community to support the work of the organization.