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Executive compensation in internet‐related businesses

Executive compensation in internet‐related businesses This article discusses the pay packages of executive officers at internetrelated business. Generally, the executives’ total compensation include salary, bonuses, commissions, stock options, and other financial compensation, such as forgiveness of loans, automobile expenses, etc. The 70 to 80 percent of the CEOs’ compensations are from gains of exercising stocks. In this tumbling market, shareholders are suffering the loss from the declining stock prices. However, many CEOs are still left with a mountain of wealth. Meanwhile, the board of directors also raises the stock options to retain their top talents even to those who are under‐performing. Besides CEOs’ compensations, we will also compare the CEO pay with non‐CEO pay packages. The CEOs compensations are still the highest. Furthermore, the average CEO made 42 times the average hourly worker’s pay in 1980, 85 times in 1990, and a staggering 531 times in 2000. Many shareholders are against these out of control pay packages. We conclude that it is time to review the process of determining the CEOs compensation, and that the significant presence of pay‐by‐performance should be taken into account in any examination of the practice and regulation of corporate governance. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Management Research News Emerald Publishing

Executive compensation in internet‐related businesses

Mei H. Chen; Brian H. Kleiner
Management Research News , Volume 27 (8/9): 14 – Aug 1, 2004
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Publisher
Emerald Publishing
Copyright
Copyright © 2004 Emerald Group Publishing Limited. All rights reserved.
ISSN
0140-9174
DOI
10.1108/01409170410784590
Publisher site
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Abstract

This article discusses the pay packages of executive officers at internetrelated business. Generally, the executives’ total compensation include salary, bonuses, commissions, stock options, and other financial compensation, such as forgiveness of loans, automobile expenses, etc. The 70 to 80 percent of the CEOs’ compensations are from gains of exercising stocks. In this tumbling market, shareholders are suffering the loss from the declining stock prices. However, many CEOs are still left with a mountain of wealth. Meanwhile, the board of directors also raises the stock options to retain their top talents even to those who are under‐performing. Besides CEOs’ compensations, we will also compare the CEO pay with non‐CEO pay packages. The CEOs compensations are still the highest. Furthermore, the average CEO made 42 times the average hourly worker’s pay in 1980, 85 times in 1990, and a staggering 531 times in 2000. Many shareholders are against these out of control pay packages. We conclude that it is time to review the process of determining the CEOs compensation, and that the significant presence of pay‐by‐performance should be taken into account in any examination of the practice and regulation of corporate governance.

Journal

Management Research News – Emerald Publishing

Published: Aug 1, 2004

Keywords: Managers; Shareholders; Directors; Boards; Eexecutive compensation; Stock options; Corporate governance; Benefits of control

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