Responsible Executive Compensation for a New Era of Accountability Essa

Compensation and the Chief Executive officer Executive pay has come under increasing scrutiny in recent literature in the wake of the growing publicity border managerial failures and executive self-interest. Financial experts have long been examining the problem of reorient the performance of executives with their salaries and benefits. Public discontent with the visible top-heaviness of the compensation structure has brought this unveil into the spotlight throughout the business world. Experts point to the flaws of traditional payment schemes and adjure a number of different solutions. Shareholder value and the success of the steady can be significantly affected by executive performance. Hence, accord the advantages and costs of the current trends in executive compensation is crucial to the compensation committee of a Fortune 500 corporation. The compensation committee has a difficult task upon its shoulders. It essential construct pay programs that attract and have the best talent to address the individual organizations needs. It must design a strategy that generates superior returns for investors, appropriately measure managerial performance, and institute a pay practice which is fair to both employees and shareholders and which rightfully drives business results (Mercer p.4). There is abundant theory and research on the strategies belief to accomplish these goals, and the emerging trends in executive compensation seem to be highly successful. The growing public criticisms of ultra-high executive pay are non unfounded. According to Mr. Meizhu Lui, the ratio of CEO pay as a fourfold of average worker pay has grown tremendously, from 41 to 1 in 1960 to 411 to 1... ...an imagination Consulting. (Jan. 26, 2004). Responsible Executive Compensation for a New date of reference of Accountability. Perspective. Retrieved October 14, 2006, from http//www.mercerHR.com/responsibleECMercer Human Resource Con sulting. (Aug. 9, 2004.). Tackling the Challenge of Aligning Pay with Performance. Perspective. Retrieved October 14, 2006, from http//www.mercerHR.com/perspective.Parrino, Robert. (2002). Rewrapping the package managerial incentives and corporate governance. Texas Business Review, 1(5). Retrieved Sept. 27, 2006, from the Business & Company Resource Center database.Traichal, Patrick A., George W. Gallinger, and Steve A. Johnson. (1999). The consanguinity between pay-for-performance contracting and external monitoring. Managerial Finance, 68(21). Retrieved Sept. 27, 2006, from the Business & Company Resource Center database.