Executive Compensation Best Practices demystifies the topic of executive compensation, with a hands-on guide providing comprehensive compensation guidance for all members of the board. Essential reading for board members, CEOs, and senior human resources leaders from companies of every size, this book is the most authoritative reference on executive compensation.
Preface xi
Acknowledgments xvii
CHAPTER 1 Introduction 1
Should the CEO be Rewarded or Punished for Events Beyond the CEO’s Control? 1
Warren E. Buffett on Executive Compensation 3
CEO Compensation Theories 4
CEO Forced Exit Packages 6
Private Equity Compensation 8
Entertainment and Sports Celebrities 8
Benefits of Good Corporate Governance 9
CHAPTER 2 Motivating Executive Performance 13
Tying Performance to the Strategic Plan 15
Unintended Consequences 16
Firm Expansion and CEO Pay 19
Equity-Based Compensation 20
A New Role for CEOs 21
Satisfying Investor Expectations 22
Minimum Equity Ownership Requirements 23
CHAPTER 3 Peer Groups and Benchmarking 25
Adjusting the Peer Group 28
Peer Groups for Different Levels of Executives 30
Benchmarking 31
Lake Wobegon Effect 33
Benchmarking with Medians 34
CHAPTER 4 Competing With Private Equity Funds 35
CHAPTER 5 Explaining Executive Compensation to Shareholders 43
Introduction 43
Reconstructing Executive Compensation Disclosure for lƒ.
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