CHAPTER 1

Introduction to Executive Compensation

Too often, executive compensation in the U.S. is ridiculously out of line with performance.

—Warren Buffet

The chief executive officer (CEO) of a corporation and his or her management team are responsible for the operations of the business and its continued financial success. The CEO and executive team are almost always highly paid and their relative total compensation has mushroomed over time. Most of the compensation is now designed to be performance based because of the charges that executives manipulate their earnings and stock price for their own self-interest. The compensation at some companies became so egregious (Enron and other tech-bubble failures or Citigroup and other banks during ...

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