Below is your assignment for this subject. Please read the brief and instructions thoroughly.
An ongoing debate in practice and academia is the total remuneration a Chief Executive Officer (CEO) receives compared to the recent or current performance of an organisation, especially when a loss occurs. Some reports in the media or from peak body organisations and associations discuss the huge divergences, for example, a salary package (including payouts when CEOs leave voluntarily or otherwise) in the many millions of dollars when a loss of much greater proportions is reported.
The following practitioner article is an example of the type of credible source (i.e. scholarly resource), that could assist you in undertaking this assessment.
Kay, I & Martin, B 2017, ‘The SEC’s mandated CEO pay ratio in the context of income inequality: perspectives for compensation committees’, The Corporate Governance Advisor, vol. 25, no. 1, pp. 1-8.
Part A: Written report
Conduct a review of remuneration as a corporate governance issue and write a report with your findings. Use the concepts, tools and techniques learned in this subject to review the extent of these statements at the individual, board, organisation or other levels.
These focus questions could guide you in writing your report:
- How are some organisationsable to successfully align CEO/executive remuneration with theorganisation’sobjectives tomaximiseshareholder wealth viaorganisationalperformance? Discuss what has led to the success and how it could be sustained (e.g.short termand long-term incentives, subcommittee(s) oversight, etc.).
- What are some of the corporate governance causes that lead to organisationsbeing criticised or being less successful in aligning CEO/executive remuneration withorganisationsobjectives tomaximiseshareholder wealth viaorganisationalperformance.Particularly when large losses occur or small profits. Discuss the reasons for this and what can be done to address them.
Your assessment must include:
- A description of the issue related to the remuneration as a corporate governance issue.
- An outline of the bases or criteria for the review of the CEO/executive remuneration and organisationalperformance governance issue(s). For example, mention which rules, standards or guiding principles are relevant for the review, discuss their importance and why it is appropriate for you to use them.
- A critical review of the organisation’sgovernance applying the relevant concepts, principles, standards or other tools and techniqueslearntduring this subject.
- Recommendations for suggested improvement based on your review.
It is important to demonstrate your knowledge about the corporate governance issue and to clearly reference your sources. Read about your issue in journal articles (using the AIB Online Library), books (including the textbook), industry reports, business literature, etc. Remember to note down your sources and reference your sources in the report.
To do well you need to structure your discussion appropriately, use good references, and clearly link recommendations to the description and analysis presented earlier in the report.