Governance refers to the processes and structure by which the business and affairs of the company are directed and managed. The primary objective of sound corporate governance is to contribute to improved corporate performance and accountability in creating long term shareholder value. The main objective of this term paper is a brief overview of possibilities to give the board of directors reasons for improving the long term shareholder value. In order to achieve this goal the second chapter of this term paper deals with the concept of corporate governance itself. In taking a closer look at some basic approaches the main tasks and individual and team objectives should be brought out. The third chapter deals with the so-called principal-agent-problem. The essence of the agency-problem is the separation of ownership und control or the conflict of interests among owners and managers. Chapter four introduces remuneration systems which are qualified to solve the agency problem and satisfy both: owners and managers of a company. Finally, chapter five concludes the paper.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Corporate Governance
- Principal-Agent-Problem
- Remuneration Systems
- Classification of Incentives
- Intrinsic and Extrinsic Incentives
- Intrinsic Incentives
- Extrinsic Incentives
- Material and Immaterial Incentives
- Material Incentives
- Immaterial Incentives
- Intrinsic and Extrinsic Incentives
- Design of Remuneration Systems
- Bonusbank
- Stock Option Plans
- Classification of Incentives
- Conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This term paper aims to provide a comprehensive overview of corporate governance and remuneration systems, focusing on their role in improving corporate performance and long-term shareholder value. The paper delves into the concept of corporate governance, examining its various aspects and exploring the principal-agent problem. It then analyzes remuneration systems, including different types of incentives and design elements, as a potential solution to the agency problem.
- Corporate Governance and its role in improving corporate performance.
- The principal-agent problem and its impact on shareholder value.
- Remuneration systems as a tool for addressing the agency problem.
- Different types of incentives and their effectiveness in motivating managers.
- Design elements of remuneration systems that contribute to long-term shareholder value.
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: Introduces the concept of corporate governance and its significance in the modern economy. The chapter outlines the paper's objective, which is to explore possibilities for improving long-term shareholder value through effective corporate governance and remuneration systems.
- Corporate Governance: This chapter defines corporate governance and examines different perspectives on its scope and purpose. It discusses the role of corporate governance in ensuring alignment between management actions and shareholder interests.
- Principal-Agent-Problem: This chapter explores the concept of the principal-agent problem, which arises from the separation of ownership and control in corporations. It analyzes the conflict of interests that can emerge between owners (principals) and managers (agents).
- Remuneration Systems: This chapter delves into the design and application of remuneration systems as a mechanism to address the principal-agent problem. It examines different classifications of incentives, including intrinsic and extrinsic, as well as material and immaterial incentives.
Schlüsselwörter (Keywords)
This term paper focuses on corporate governance, remuneration systems, shareholder value, principal-agent problem, incentives, bonusbank, stock option plans, and long-term performance. It explores the complex relationship between these elements and their impact on corporate decision-making and overall business performance.
- Quote paper
- Mag. Klaudia Blizek (Author), 2004, Corporate Governance and Remuneration Systems, Munich, GRIN Verlag, https://www.grin.com/document/27601
