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Full-Text Articles in Law
Employee Say-On-Pay: Monitoring And Legitimizing Executive Compensation, Robert J. Rhee
Employee Say-On-Pay: Monitoring And Legitimizing Executive Compensation, Robert J. Rhee
Robert Rhee
This Article proposes the adoption of employee say-on-pay in corporate governance. The board would benefit from an advisory vote of employees on executive compensation. This proposal is based on two considerations: firstly, the benefits of better monitoring and reduced agency cost in corporate governance; secondly, the link between executive compensation and income inequity and wealth disparity in the broader economy. If adopted, shareholders and employees would monitor executive performance and pay at different levels. Shareholders through the market mechanism can only monitor at the level of public disclosures and share price. Employees can leverage private information. Non-executive managers in particular …
Stock Appreciation Rights And The Sec: A Case Of Questionable Rulemaking, Stuart R. Cohn
Stock Appreciation Rights And The Sec: A Case Of Questionable Rulemaking, Stuart R. Cohn
Stuart R. Cohn
A stock appreciation rights (SARs) program is a form of deferred incentive compensation. Grantees are awarded SAR-units representing an equal number of the grantor’s equity shares currently being traded in public markets. SARs provide grantees the benefit of stock ownership without equity interest, investment, or risk of loss. Stock appreciation rights programs offer various advantages over other forms of executive compensation and have grown rapidly in number. These advantages include the availability of benefits without the requirement of monetary payments, the utilization of SARs as an interest-free form of financing the purchase of stock under tandem stock option programs, the …
Killing Conscience: The Unintended Behavioral Consequences Of "Pay For Performance", Lynn A. Stout
Killing Conscience: The Unintended Behavioral Consequences Of "Pay For Performance", Lynn A. Stout
Lynn A. Stout
Contemporary lawmakers and reformers often argue that ex ante incentive contracts providing for large material rewards are the best and possibly only way to motivate corporate executives and other employees to serve their firms' interests. This Article offers a critique of the "pay for performance" approach. In particular, it explores why, for a variety of mutually reinforcing reasons, workplaces that rely on ex ante incentive contracts suppress unselfish prosocial behavior (conscience) and promote selfishness and opportunism. The end result may not be more efficient, but more uncooperative, unethical, and illegal employee behavior.
Employee Say-On-Pay: Monitoring And Legitimizing Executive Compensation, Robert J. Rhee
Employee Say-On-Pay: Monitoring And Legitimizing Executive Compensation, Robert J. Rhee
Robert Rhee
This Article proposes the adoption of employee say-on-pay in corporate governance. The board would benefit from an advisory vote of employees on executive compensation. This proposal is based on two considerations: firstly, the benefits of better monitoring and reduced agency cost in corporate governance; secondly, the link between executive compensation and income inequity and wealth disparity in the broader economy. If adopted, shareholders and employees would monitor executive performance and pay at different levels. Shareholders through the market mechanism can only monitor at the level of public disclosures and share price. Employees can leverage private information. Non-executive managers in particular …