THE WRONG PERSPECTIVE ON EXECUTIVE PAY

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Alexander Chau

DOI:10.22495/cbv11i1art1

Abstract

Controversial commentaries as brought on by the financial crisis of 2008 regarding corporate remuneration policies give misplaced priority to political considerations over the governance considerations of capitalist orthodoxy. Executive pay rules during the crisis reflected the market’s sense of low risk that was prevalent at the time. The existing pay-for-performance model as applied demonstrates that the agency problem is not widespread and more a matter of transparency than one of systemic corporate graft. The wrong perspective involves pushing for social equality, rather than business efficacy, as the ultimate driver of reforms in executive remuneration.

Keywords: Executive Pay, Financial Crisis, Remuneration, Risk

How to cite this paper: Chau, A. (2015). The wrong perspective on executive pay. Corporate Board: role, duties and composition, 11(1), 6-11. http://doi.org/10.22495/cbv11i1art1