Just Reward?

Executive remuneration is both a complex and a highly emotive subject. Rarely does a day go by without the press denoucing some top executive's pay-off or rise as scandalous, outrageous — even immoral. Given that such figures make most people's head reel, most of us would afree, but on what grounds? We may question whether these high-flyers are worth the extraordinary sums they get paid, but are we making an informed judgement? Do we really understand the decision-making processes that go on behind the boardroom door?

In Just Reward?, the first in-depth look at top executive pay, Anthony Williams sheds light on an issue which is of vital importance to us all. Highly readable, yet rigorous, Just Reward? examines every aspect of how and why decisions on who gets paid what are made.

For anyone wanting to appreciate how and why executive pay has reached today's dyzzy heights, Anthony William's fluent account provides the first real insight.

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

Discusses how senior managers should be compensated and how the current situation has become what it is, on both sides of the Atlantic. Please observe that this book is written in 1992; so is there a reason that Swedish Boardmembers and Senior Executives haven't read it? Except the standard level of incompetence? You decide…