Remuneration & Other Subjects While some people including investors and analysts just like to stir the pot, there are indeed some valid concerns relating to the ethics, motivations, decisions and biases of investors, stakeholders and others involved in the accounting and/or investing within an organization.
The authors of this report have been asked to assess a number of subjects surrounding remuneration of employees and the overall corporate/social ethics involved in the same in Australia. There are also some tangential and related subjects that will also be spoken of. In total, there are five broad-based questions. The first question speaks about risk aversion, profit/wealth maximization, wealth management, different stances that different people and personnel take vis-a-vis risk and financial reporting manipulation. The second question references the horizon problem. This second question looks at the different motivations and perspectives that different people in an investment and accounting situation might take. Managers have their axe to grind and stakeholders typically have a different one. How bonuses for investment managers figure in will also be explored. Finally, there will be a review for the fifth question that pertains to the ...
Question I - Risk Aversion
The underlying assumption of accounting theory, which is used to explain and predict behaviours, is that all individuals will act to further their own self-interest (Rankin et.al 2012). According to Kolb (2010), agency theory indicates that managers as agents, are assigned the task of day-to-day operation of a company by the shareholders as principals. However, a conflict arises as the self-interest of these two parties are not aligned. Classical economic theory suggests a higher risk strategy can result in higher rewards than those achievable from low risk approach. Shareholders are desirable of the higher returns, and typically, shareholders diversify their risk by having shares in multiple companies, and likely have other sources of income (Rankin 2012). Shareholders seek to maximize their personal wealth, which equates to a maximization of share price and dividends paid which increases with higher risk strategies (Kolb 2010).
In contrast, managers are likely to follow a risk averse strategy as their current salary and career prospects are tied to their current employment situation (Ferrarini & Moloney 2004). Managers are also likely to only focus on the short-term earnings that impact their current employment (Kolb 2010). To counter this risk aversion,…
While some people including investors and analysts just like to stir the pot, there are indeed some valid concerns relating to the ethics, motivations, decisions and biases of investors, stakeholders and others involved in the accounting and/or investing within an organization.
In order to compare the executive compensation in both countries, the countries firms should be matched and compared according to industry, size and operation. The executive compensation can be measured or compared accurately according to the industry and firms sizes. From the data, it was found that the executive compensation in both countries were high whereas the firm performance was reducing. The data collection for the executive compensation in
Pay Equity 1001 EHR Tutorial Exercise Week No & Date: Corrections/refinement during tutorial discussion - feedback (Done in class) What explanations are given by this alliance to account for the gender-wage gap? What evidence is used to support this? Is it convincing? Why or why not? You might also like to look at the submissions made to Fair Work as part of the equal remuneration case. Submissions were also made by employers and employer associations
As we take a broader view of the Australian employment landscape, a very different picture emerges. The inaugural census of women in business (released in 2002) surveyed the top 152 companies listed on the Australian Stock Exchange and reported that women held 8.4% of executive management positions, 52.6% of companies had no women executive managers, only 17.8% of companies have two or more women executive managers, and women held
(Millstein, 2005) Since United States and Australia are countries which are already considered to be globally competitive that has attained its almost perfect status in the world market, developing countries are basically taking into account every step that they make for which they might soon adapt to attain the same position in the global context. Therefore, studying both countries' corporate governance is necessary in order for other developing countries to
Lentil as Anything: Pay as You Feel As the world changes and capitalism takes over, a counter trend is also observed. In other words, in a world of profits, pressure and competition, there are some entities which militate for different values. They are non-profit agencies which promote human dignity and human rights and which strive to make the world a better place. Such an agency is Lentil as Anything. Lentil as Anything
Given the scarcity of lever machines on the market and the unique nature of the niche market, price elasticity of demand is expected to be low. There may not be many prospective consumers, but those who want this product will be keen and are unlikely to be strongly price sensitive. The best price would therefore be at the high end of the range, $1,200. This means that the selling