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- Title
Managing the Executive Compensation -- Moral Hazard Tie.
- Authors
Snell, Jeffrey
- Abstract
The article discusses the executive compensation management to minimize moral hazard in financial company executives in the U.S. It is stated that moral hazard is related to executive compensation, wherein an executive is more likely to engage in excessive risk-taking if he is rewarded for profitable investments but protected from negative consequences of failures. It notes that the Emergency Stabilization Act of 2008 prohibits the provision of compensation to senior executives who take excessive risks by financial companies receiving the U.S. Treasury funds. It also mentions that moral hazard can be managed by using delaying rewards of incentive systems, which include stock ownership plans, long-term incentives and recoupment plans.
- Subjects
UNITED States; MORAL hazard; EXECUTIVE compensation; RISK management in business -- Law &; legislation; FINANCIAL services industry; UNITED States. Dept. of the Treasury; STOCK ownership; LABOR incentives; SET-off &; counterclaim; COMPENSATION management
- Publication
Business Journal for Entrepreneurs, 2009, Vol 2009, Issue 3, p79
- ISSN
1548-1859
- Publication type
Article