Department

Accounting

Publication Year

2016

Abstract

The purpose of this paper is to assess whether or not there should be a limit on CEO compensation in addition to examining the different forms of pay used to compensate the CEO to determine if there is an optimal structure. The paper will begin by looking at how the landscape surrounding executive compensation has changed since 2010 with the passage of the Dodd-Frank Act. Following that, the paper will explore the arguments for and against limiting CEO pay to ultimately conclude if a limit on CEO compensation is appropriate. After this, the paper will look into the structure of current CEO pay packages and evaluate the use of different forms of compensation to determine if an optimal structure for a pay package exists. Finally, the paper will examine the results of a survey taken by 75 accounting, business and financial economics majors at the University of Redlands regarding what and how CEOs feel they should be paid versus what and how shareholders in the same company feel the CEO should be paid.

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