1. Banker's Pay - Redesigning Compensation Pay
The principal party here represents shareholders and the agent the CEO, the shareholders are the owners and the CEO is the one in control. ... This levels the interests of the shareholders and the CEO and introduces a positive incentive for the CEO. ... The aim is to make the objectives of the shareholder and the CEO more alike to encourage the CEO to be less risk averse and act in accordance with the shareholders interests. ... " The CEO can be risk adverse in case he will loose his job however severance pay is meant to be tools to spur the CEO on to once again regulate both parties in...
- Word Count: 2496
- Approx Pages: 10
- Has Bibliography
- Grade Level: Undergraduate