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Thematic Studies - 14/12/2015

Executive remunerations : does social responsibility really matter?

In recent years the allocation of huge bonuses to some executives in large corporations has been object of several controversies.

In recent years the allocation of huge bonuses to some executives in large corporations has been object of several controversies.

The criticisms on executive pay lead in certain cases to legal proceedings, to shareholder revolts or to drastic reductions of the bonuses. In all cases, the image of the company and the reputation of managers may have been affected, alongside with the trust of the working force in the top-management and the support of shareholders.

These tensions question the idea of remuneration itself, its contents and its objectives: what is the goal to be achieved though the variable remuneration plan of CEOs? What is the meaning of merit and performance when applied to top executive functions? Even if they have a formal employment contract and are defined as “executive officers”, top managers are neither employees in a strict sense nor mere executors of the Board’s wishes or of shareholders’ interests.

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Keywords : ESG, World