If you need an accessible version of this item please contact JSTOR User Support

Corporate Governance Reform and CEO Compensation: Intended and Unintended Consequences

Ella Mae Matsumura and Jae Yong Shin
Journal of Business Ethics
Vol. 62, No. 2, Contemporary Ethical Issues in Accounting, Finance, Management and Marketing (Dec., 2005), pp. 101-113
Published by: Springer
Stable URL: http://www.jstor.org/stable/25123649
Page Count: 13
  • Download PDF
  • Cite this Item

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If you need an accessible version of this item please contact JSTOR User Support
Corporate Governance Reform and CEO Compensation: Intended and Unintended Consequences
Preview not available

Abstract

Recent scandals allegedly linked to CEO compensation have brought executive compensation and perquisites to the forefront of debate about constraining executive compensation and reforming the associated corporate governance structure. We briefly describe the structure of executive compensation, and the agency theory framework that has commonly been used to conceptualize executives acting on behalf of shareholders. We detail some criticisms of executive compensation and associated ethical issues, and then discuss what previous research suggests are likely intended and unintended consequences of some widely proposed executive compensation reforms. We explicitly discuss the following recommendations for reform: require greater independence of compensation committees, require executives to hold equity in the corporation, require greater disclosure of executive compensation, increase institutional investor involvement in corporate governance (including executive compensation), and require firms to expense stock options on their income statements. We provide a brief summary discussion of ethical issues related to executive compensation, and describe possible future research.

Page Thumbnails

  • Thumbnail: Page 
[101]
    [101]
  • Thumbnail: Page 
102
    102
  • Thumbnail: Page 
103
    103
  • Thumbnail: Page 
104
    104
  • Thumbnail: Page 
105
    105
  • Thumbnail: Page 
106
    106
  • Thumbnail: Page 
107
    107
  • Thumbnail: Page 
108
    108
  • Thumbnail: Page 
109
    109
  • Thumbnail: Page 
110
    110
  • Thumbnail: Page 
111
    111
  • Thumbnail: Page 
112
    112
  • Thumbnail: Page 
113
    113