Looking at Yahoo!\'s 10-K annual report and Proxy Statement, the following quest
ID: 2739969 • Letter: L
Question
Looking at Yahoo!'s 10-K annual report and Proxy Statement, the following questions need to be answered:
According to the compensation committee, is the current compensation of the top executive(s) justified based on the company’s past and/or current performance?
Review the Management’s Discussion and Analysis of the Financial Condition and Results of the Operations (the MD&A) in the company’s annual report. Based on the information in the MD&A, is the compensation to top executives justified? Is it consistent with the compensation committees’ analysis?
Based on the information in the proxy statement and the annual report, would any of the other executive officers be an appropriate replacement for the CEO? If not, whom would you recommend as an outside candidate (hint: review the profiles of top management in competitors’ annual reports)?
Explanation / Answer
Answer :-
In Proxy Statement, a company must disclose information concerning the amount and type of compensation paid to its chief executive officer(CEO), chief financial officer(CFO) and the three other most highly compensated executive officers. A company also must disclose the criteria used in reaching executive compensation decisions and the relationship between the company's executive compensation practices and corporate performance. There are serious problems with CEO compensation, but excessive pay is not the biggest issue. The relentless focus on how much CEOs are paid diverts public attention from the real problem, how CEOs are paid. In most publicly held companies, the compensation of top executives is virtually independent of performance. On average, corporate America pays its most important leaders like bureaucrats. Is it any wonder then that so many CEOs act like bureaucrats rather than the value-maximizing entrepreneurs companies need to enhance their standing in world markets.
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