Viacom Ceo Sumner Redstone Took Home About.Deu Major Shareholdings Directive to Eu New Transparency Directive...

Viacom chief executive officer Sumner Redstone took home about $28 meg in 2004, including a inducement of $16.5 million, even as his ships gilds striving dropped 11 percent during the financial year. Applied Materials chief operating officer Mike fly the coop got a tidy $5 million bonus in 2004, despite a stock drop off of to a greater extent than 22 percent. That same year Rick Wagoner, CEO of ordinary Motors, saw GM stock plunge 25 percent, hitherto he still pocketed a $2.5 million bonus except slightly less than his award in 2003, when GM stock actually rose. So much for accountability. As noted, this phenomenon is ab initio kinda an puzzling. Why would firms reward incompetent executives? Dont they accept to make money? Yet before dismissing berth brokers in the business community as self-destructive and/or incredibly stupid, perhaps we should give them the benefit of the doubt and chase for a rational ex patternation. The most important point that scoffers resembling Crowley over manifestation is that the business world is uncertain. When a company brings in a new executive, it is not at all unembellished what steps he or she should take to turn the company around and boost profits. (If it were obvious, the company wouldnt waste millions of dollars hiring the executive.

) this repetitive regardless of the executives competence, it is entirely possible that the computer programme will failand the executive knows this as well as anyone else. Because of this, it would be very risky for such an executive to indicate a contract in which, say, he or she cross $20 mi llion if the company were profitable, but $5! 0,000 if the company tanks. quite than sign that contract, the executive (who must be quite substitute to be offered such a job in the carbohydrate place) could consult or take a less excite position and earn, say, $5 million for sure. This principlethat an executive gets nonrecreational handsomely even if the company does poorlydoesnt look outrageous when the numbers are lower. For example, when GM stock plunged 25 percent, did Crowley expect the assembly-line workers to give back a quarter of their...If you deprivation to get a full essay, order it on our website: OrderCustomPaper.com

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