Executive Pay: Under Attack
Abstract
Chief Executive Officers (CEOs) of a company provide essential leadership to the entire business. Basic components of executive compensation include a combination of: salary, bonus, perquisites, personal benefits, stock, and stock options.
Current executive compensation legislation includes: Equal Pay Act of 1963, Sarbanes-Oxley Act of 2002, the FAS 123R, and the recent Securities and Exchange Commission rules requiring companies to disclose more information regarding the executive perquisites, stock options and future pension benefits of their top executives. In November 2005, a new law, The Protection Against Executive Compensation Abuse Act (TPAECAA) was introduced.
In light of recent corporate scandals and the collapse of companies, the public has renewed their scrutiny of the excesses of CEO compensation. An examination of the abuses including: greed, realities of the activities of the board of directors, current legislation and tax policies, and outsourcing yield few conclusions. Despite all the rhetoric and legislative initiatives, most experts believe that executives in the future will not be paid less, just differently.
Executive Pay: Under Attack
The words, ‘executive compensation’, generate great controversy in the United States and all around the world. Newspapers, magazines, radio, television and internet sites abound with titles that tout ‘Executive Excess’; ‘Paychecks on Steroids’; ‘The Madness of Executive Compensation’; ‘When the Boss Gets Paid Too Much’.
Recent concern about how and how much CEOs make is not a new pheno ...