Executive Pay Compensation Research Paper Example | Topics and Well Written Essays - 2000 words

Executive Pay Compensation - Research Paper Example So far, research has indicated that people are the most important resources that businesses require in creating their competitive strategies. This stems from the fact that people have the capability to understand the business environment and ways of creating their success. In having a competent staff, one of the approaches used is ensuring that people get the best pay for their work they do in the business. Some business owners believe that having a competent staff is the key to having effective and efficient work. While it may be true, the approaches used in achieving an effective and competent staff are what differ from one business to another. One of the questions that have kept appearing among most of the researchers concerns the real worth that can be attached to business executives. Are the top managers and other CEOs justified by receiving millions of dollars at the end of their month on their paycheck? If that can be case, can their salaries be justified from the work that th ey do? These among other questions have formed the centres of discussion whenever employee compensation is mentioned. While some businesses often use money as a means of motivating their staff towards better performance, others often prefer using other non-monetary forms of incentives to achieve same; this has led to a huge controversy concerning executive compensation pay.Inasmuch as business executives have continued to be the beneficiaries of huge pays from their companies, some people have been outraged by this observation.

Advanced financial accounting Assignment Example | Topics and Well Written Essays - 1500 words

Advanced financial accounting - Assignment Example Positive Accounting Theory (PAT) involves predictions of choices of firms as pertains accounting policies and the response of firms to any new accounting policies. It also seeks to explain such decision-making actions by the management of different companies. Positive Accounting Theory makes use of theories to draw predictions on the choices management would likely make when selecting accounting policies to implement or use (Deegan, 2009, p.53). According to the theory, the conduct of any firm is in such a way that would maximize its best interests. In this regard, managers would likely do what they feel is best for the company at the expense of the interests of shareholders. In arriving at the choices to pursue, firms are guided by factors within the industry in which they operate. It is such factors on which the positive accounting theory lays a focus. Positive Accounting Theory’s focus is on the relationship that exists between different stakeholders in a business. The stakeholders provide resources to the firm in different capacities. Apart from this relationship, the theory also looks at how accounting would affect the functionality of such relationships. Through agency theory, positive accounting theory explains the possible motivations that guide managers in their choice of preferred accounting methods. In this light, the assumption is that managers, who are agents, would seemingly engage in activities that would create benefits for them at the expense of their principals (Deegan, 2009, p.54). The introduction of restrictive contracts, therefore, comes handy. However, managers still need some freedom to make decisions dependent on the situation. The positive accounting theory has two perspectives namely the efficiency perspective and the opportunistic perspective. The perspectives explain the conduct of managers in as much as choosing accounting policies is concerned. Under the efficiency perspective,