Executive Compensation Schemes Essay Example | Topics and Well Written Essays - 3000 words

Executive Compensation Schemes - Essay Example A promising action to address this problem is to develop frameworks for employee stock options valuation that will enhance the quality of compensation disclosure. This lack of information also does not help shareholders determine the company's long term prospects. The debate on executive compensation continues to acquire a national scope with the string of investment bank failures. Many business analysts put forward corporate reforms that try to construct payment schemes that will really induce CEOs to pursue the shareholder interest. When Nike paid William Perez US $18.2 million dollars in 2006, it made him the highest-paid chief executive. However, it was during Perez' one-year tenure that Nike's stock price dropped by more than $7 per share and the Swoosh lost US $2 billion dollars in market value. Nike's board asked the underperforming Perez to leave the following year. A US government official acknowledged the exorbitant executive pay in large American companies. Christopher Cox, chairman of the US Securities and Exchange Commission had admitted that executive compensation had changed but the SEC's disclosure rules have not been able to keep up with the pace. Company disclosure obfuscates rather than provides the clarity regarding executive compensation. (Seattle Times, July 9, 2006) US President Barack Obama had implemented restrictions on pay for executives at investment banks bailed out by taxpayers so as to curb Wall Street excesses and reign in public anger before the White House requests for federal funds to bail out the financial sector. Obama described Wall Street bonuses as "shameful" and expressed "disgust" at executives who reward themselves for failure (Financial Times, February 4, 2009). Obama further said that America does not disparage wealth but what gets people upset are executives who reward themselves for failure, particularly when those rewards are subsidized by US taxpayers. He pegged the compensation of executives of companies that receive assistance from the government at US $500,000 ('345,000) a year. Executives can obtain restricted stock, which could not be sold before the government had been repaid. (Financial Times, February 4, 2009). A Chief Executive Officer of a Standard & Poor's 500 company received US $14.2 million dollars in total compensation annually in 2007, according to the Corporate Library, a corporate governance research firm. The median compensation package that executives had earned was US $8.8 million dollars. In addition, the AFL-CIO labor union recognized that a fair compensation system for executives and workers is essential to the establishment of a long-term corporate value. The chief executive officers of large U.S. companies averaged US $10.8 million dollars in total compensation in 2006, more than 364 times the pay of the average U.S. worker. (Financial Week, 2007) Options constitute an important portion of executive compensation. An aspect of these programs is the discreteness of vesting dates and option exercise dates. The option grants occur infrequently. Investment banks and executive compensation The business of an investment bank is doing huge deals. This deal making usually involves raising capital either debt or equity for clients and advising on merger and aquisition transactions. In addition, investment banks sell securities to institutional investors. They also trade for their own account. Investment banks

International Human Resource Essay Example | Topics and Well Written Essays - 4500 words

International Human Resource - Essay Example However, the nature of their work and the type of organization they work for will determine how these common environmental factors are perceived - whether they are seen as positive or negative, threats or opportunities Over the last two decades there has been a profound shift in thinking about the role that people play in the success of the business, with a growing view that the management of people is a key organizational capability and one, which should be highly integrated with the strategic aims of the business. A cornerstone of this notion of International human resource management is the creation of linkage or integration between the overall strategic aims of the business and the human resource strategy and implementation Managers should keep informed about important factors and developments in both their external and internal environments. They can do this by constantly 'scanning' their environment, which is, by establishing and maintaining a network of contacts, maintaining good communication channels, keeping up-to-date in their field and monitoring important issues and activities. It is not necessary to be an expert on modern day business to know that there are few organizations entirely limited by national boundaries. The smallest independent entrepreneur in the UK will have office equipment made in Japan or the USA. At the level of large trading organizations, many of these companies operate across the globe or are the competition with the companies operating in that way. It is indeed impossible for most employing organizations to act as if their world was bounded by the national border of the country that is their home base. Across the world there is increasing extension of trading blocks, increasing development of internationally operating multinational corporations (MNC's), and increasing internationalization of business. International marketing is the performance of business activities designed to plan, price promote and direct the flow of the company's goods and services to consumers or users in more than one for a profit. (Cateora & Graham 10) A key factor in the increasing internationalism of employment is that there are cultural differences between nations. There are differences in national attitudes and value systems. International human resource strategies It is argued that all international organizations will have to develop international HRM policies and practices. This will manifestly not be easy. On the other hand, it will be crucial to the success of the international business. Schuler et al (1993:721) define the field as covering Human resource management issues, functions and policies and practices that result from the strategic activities of multinational enterprises and the impact on the international concerns and the impact on the international concerns and goals of those enterprises. Most international business employ both locals and expatriates; most have overall strategies and try to be culturally aware in each country; they aim to be successful in each location, and successful overall. If they are to achieve this they will need to have clearly thought out, well integrated human resource strategies that are part of , and contribute to , their overall international