Is Coca-Cola CEO Pay Justified or Excessive?

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ACKNOWLEDGEMENT

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.



DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

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ACKNOWLEDGEMENTII

DECLARATIONIII

CHAPTER 1: INTRODUCTION1

1.1 Background to Research1

1.2 Management Focus1

1.2.1 Criticism on CEOs Being Overpaid2

1.3 Background of Coca-cola2

1.4 Rationale and Significance3

1.5 Statement of Purpose3

1.6 Aims and Objectives4

1.6.1 Main Aims5

1.6.2 Five Objectives5

1.7 Research Questions5

REFERENCES7

APPENDIX12

Further Description and Definition of Executive Pay12

CHAPTER 1: INTRODUCTION

1.1 Background to Research

Executive pay is considered as an important concern in the business governance discussion. Otten (2008) has suggested three different approaches towards former theories explaining executive pay. The value approach, the agency approach, and the symbolic approach are three types of approaches. A crucial evaluation of the theories illustrates that the leading employment in the literature of an appropriate constricting approach of agency theory ignores the societal resolute symbolic value, which executive pay could show and the related circumstances under which executive pay is designed and arranged (Otten, 2008).

1.2 Management Focus

Executive compensation has always considered to be of much importance for both the company and the executive, as well. This consideartion is mainly important at the time of hiring a top class executive. It is a challenging task for any company to find out and hire an executive, who can prove to be an asset for the company. In this context, the executive compensation helps the company to attract and retain a top class executive. Executive compensation include, a basic salary, incentives, bonuses, shares and options, employee benefits and perks. Incentives are further divided into long term and short term incentives. The amount and existence of basic salary is certain in everymonth's package, however other components may differ depending upon the company policies and executive's performance at higher level of management (Marshall, 2006).

1.2.1 Criticism on CEOs Being Overpaid

In the course of current economic chaos, the argument over CEO pay has extensified. The propriety of heavily increased bonuses and salaries for CEOs is directing many people to inquire, “are CEOs overpaid?” Kolb (2008, p. 826) affirms that this question is an imperative one at the present time. The employees at middle management level even argue that why are CEOs being compensated at an intensity that doesn't seem to be proportionate to thier efforts and contributions to the firm, specifically in situations where they are looking after fading organisations? Simultaneously, they do not agree to the point that CEOs don't put their contributions, however if the CEO is in publicly operated firm, especially he or she is not the owner, then employees do raise the concern about CEOs being overpaid. It seems that there is a certain fallacy employees have when discussing about this ...