Executive Compensation Spring 2018

Transcription

1 Executive Compensation Spring 2018 Professor Sharon Grossman Phone: (973) Class day/time/location: HRM38:533:619:01 Monday, 7:20 10:00, Levin 103 Text: Irving S. Becker & William Gerek, Understanding Executive Compensation and Governance, World at Work Press, 3 rd edition, 2016 Additional Sources of Information: Articles by Professor Lucian Bebchuk WorldatWork the Association for Compensation Professionals has many research articles on executive compensation. A special student rate of $55 is available for full-time students with at least 9 current credit hours and part-time students with at least 6 current credit hours Create an online alert for yourself (such as on Goggle) for current articles on Executive Compensation Course Description: The executive compensation program is the most important strategic tool a company has to transparently link pay, performance and value added for its highest level employees. Under extensive scrutiny from the media and various external sources, the company s executive compensation program must be aligned with the interests of its shareholders, be competitive within its business environment, and maintain compliance with various regulatory bodies, proxy advisors and laws. This course will review the various elements of executive compensation including: base salary, short and long-term incentives, the element of risk, the role of the

2 Compensation Committee of the Board, various regulatory bodies and the laws influencing executive compensation. We will also review and discuss recent trends in the field. Concepts will be enhanced with analysis and review of various pay programs in proxy statements and through project assignments. Robust class participation is expected. Grading Components: 1. Individual case analysis #1 (25%). You will be responsible for completing a 5 page report analyzing a specific compensation topic. Potential topics and ideas will be discussed in class. 2. Individual case analysis #2 (25%). You will be responsible for completing a 5 page report analyzing a specific compensation topic. Potential topics and ideas will be discussed in class. 3. Team project (40%). You will be assigned to a team and will complete an in-depth company analysis. The analysis will consist of an in-class presentation and a 10 page paper providing the team s analysis and recommendations. Potential topics and ideas will be discussed in class. 4. Article presentation (10%). Each student will take a turn presenting for discussion a recent article sourced from the media regarding an executive compensation issue. 5. Total 100% Exceptions to the scheduled assignment deadlines will only be granted on extenuating circumstances and only with prior approval of the professor. Grading Scale: A = B+ = B = C+ = C = F = <70

3 Executive Compensation Tentative Schedule (Subject to Change) Date Topic Assignment January 22 Introduction and Executive Comp. Strategy Chapter 1 January 29 Peer Groups Risk Chapter 2 Chapter 15 February 5 Disclosure of Executive Pay Base pay Chapters 14 Chapter 3 February 12 Performance Measures for Incentive Plans Annual Incentive Plans Chapter 7 Chapter 4 February 19 LTI in Public Companies Chapter 5 Project #1 is due February 26 LTI In Private Companies CEO Assessment Chapter 6 Chapter 13 March 5 Stock Ownership programs Perquisites Chapter 10 Chapter9 March 12 Spring Break No Class March 19 Compensation Committee Governance Compensation Committee Tools Chapter 12 March 26 Chapter 13 Project # 2 due International Compensation Chapter 21 April 2 Mergers and acquisitions Initial Public Offerings Chapter 18 Chapter 19 April 9 In class lab Group Project April 16 Executive Employment

4 Contracts Board Compensation April 23 Trends in Executive Comp TBD April 30 Group project presentations Chapter 11 Chapter 17 Final Group Project presentations and papers due May 7 Wrap -up SMLR Course Learning Objectives Written & Oral Communication Communicate effectively at a level and in modes appropriate to an entry level professional. Communicate complex ideas effectively, in standard written English Analyze and synthesize information and ideas from multiple sources to generate new insights Produce quality research papers with proper convention of attribution/citation Produce high quality executive summaries Make an argument using contemporary and/or historical evidence Present ideas and arguments in a logical and effective way Quantitative Skills Apply appropriate quantitative and qualitative methods for research workplace issues Formulate, evaluate, and communicate conclusions and inferences from quantitative information Apply quantitative methods to analyze data for HR decision making including cost-benefit analyses, ROI, etc. (HRM) Apply qualitative methods appropriately, alone and in combination with quantitative methods Theoretical Perspectives - Demonstrate an understanding of relevant theories and apply them given the background context of a particular work situation.

5 Demonstrate an understanding of the practical perspectives, theories and concepts in their field of study Evaluate and apply theories from social science disciplines to workplace issues Application Demonstrate an understanding of how to apply knowledge necessary for effective work performance. Apply concepts and substantive institutional knowledge, to understanding contemporary developments related to work Understand the legal, regulatory and ethical issues related to their field Develop human resources management functional capabilities used to select, motivate, and develop workers (HRM) Understand the internal and external alignment and measurement of human resource practices (HRM)