Just Reward?

The Truth about Top Executive Pay

Anthony P. Williams

Publisher: Kogan Page, 1994

ISBN: 0-7494-1987-3

Synopsis:

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Table of Contents:

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1. Introduction
• What is an Executive?
• How can High Pay be Justified?
• About this Book
2. Economic and Social Changes
• The Historical Situation
• Board Pay Compared with Other Indicators
• Developments Abroad
• Widening Horizons; The Globalisation of Business
• The Effects of Recession
3. The Effects of Privatisation
• Competitiveness
• Rate of Increase
• Relationship Between Pay and Performance
• External Recruitment
• Pensions
• Share Options
4. The Theory of Remuneration – What Pay is Supposed to Be For
• The Market-Based Approach
• The Equity-Based Approach
• What the Executive Contracts to Provide
• Performance-Related Pay
• Executive Pay and the Economic Perspective
5. Who Is Involved in the Decision-Making Process?
• The Non-Executive Function
• The Role of the Chief Executive
• Key Internal Advisers
• External Advisers
• The Shareholders
• The Bankers
• Other Influential Bodies or Groups
• The Executive Directors
6. What Are the Sources of Information?
• Remuneration Surveys
• Headhunters
• Annual Reports
• Company Performance Data Sources
7. What Is the Market?
• Is There a Separate Market at the Top?
• Board Level Turnover
• The Problems of Comparision with the Market
• Defining the Market Segment
• Positioning in the Selected Market
8. The Executive Pay Package
• Base Salary
• Annual Bonus Scheme or Short-Term Incentive (STI)
• Share Options
• Other Forms of Long-Term Incentive (LTI)
• Share Ownership Schemes
• Benefits
• Service Contracts
9. How Is Performance Measured or Assessed?
• Role of Chief Executive
• Executive Performance Measures
• Share Ownership and Levels of Performance
10. What Is the Decision Process? Corporate Governance Explored
• Definition of Corporate Governance
• The Cadbury Committee Report
• The Remuneration Decision Process
11. How Are Decisions Communicated and How Much Should Be Disclosed?
• Levels of Disclosre
• Disclosure in the US
• The Value of Briefing Sessions
• Disclosure – Voluntary or Statutory?
12. How Should These Decisions Be Evaluated?
• Defining the Objectives
• Evaluating Decisions
13. Lessons from the US
• US Executive Pay Levels and the Impact of LTI
• Stock Options as a Long-Term Incentive
• The US Corporate Governance Process
• Proposals for Reform
• What Can the UK Learn from This?
14. Developments in Continental Europe
• France
• Germany
• Netherlands
• Sweden
• Switzerland
• Possible Effects on Privatisation
15. Conclusion: How Decisions Should Be Taken and How Abuses can Be Avoided
16. Appendix 1 – Methodology Used in Research Reported in Chapters 3 and 9
17. Appendix 2 – Measuring the Value of Executive Stock Options
18. Appendix 3 – Hay Process of Valuation of Long-Term Incentives, Share-Based and Cash
19. Appendix 4 – Role of the Board Remuneration Committee
20. Appendix 5 – Role of the Non-Executive Director
21. Appendix 6 – Role of the Non-Executive Chairman
22. Appendix 7 – Corporate Governance in Grand Metropolitan (from Annual Report 1992)
23. Appendix 8 – An Example of how New Disclosure Requirements are Met: Citicorp 1994
24. Appendix 9 – Steps for Remuneration Committees in Formulating and Implementing their Remuneration Strategy
25. Appendix 10 – The Hay Guide Chart – Profile Method of Job Evaluation