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At the end of this chapter, learners should be able to:

• Explain the major components of executive compensation.

• Understand the role of objectives, costs and risk in designing executive compensation packages.

• Explain the influence of transparency, corporate governance and corporate social responsibility practices on executive compensation in an organisation.

Explain the major components of executive compensation.

Understand the role of objectives, costs and risk in designing executive compensation packages.

Explain the influence of transparency, corporate governance and corporate social responsibility practices on executive compensation in an organisation.

Ethics is fundamentally a science of social and collective responsibility. Ethics concerns human behavior as responsible or accountable. Because of the nature of social interaction, certain members of the society will bear greater authority, and hence, greater individual and social responsibility than others. In our world, personal responsibility and social responsibility are hardly separable. Personal responsibility becomes responsibility for the world because the person and the world are inseparable. In this chapter, we use the term responsibility from a legal, ethical, moral, and spiritual (LEMS) standpoint as some promise, commitment, obligation, sanctioned by self, morals, law, or society, to do good, and if harm results, to repair harm done on another. Hence, responsibility from a moral perspective is trustworthiness and dependability of the agent in some enterprise. Its inverse is exoneration – the extent to which one is excused from commitment and repairing the harm done to others by one’s actions. We apply the theories and constructs of executive responsibility to two contemporary cases: (1) India’s Super Rich in 2014 and (2) the Fall and Rise of Starbucks. After exploring the basic notion of responsibility, we present a discussion on the nature and obligation of corporate responsibility into three parts: Part I: Classical Understanding and Discussion on Corporate Responsibility; Part II: Contemporary Understanding and Discussion on Corporate Responsibility, and Part III: A synthesis of classical and contemporary views of responsibility and their applications to corporate executive responsibility.

This chapter attempts to reinvigorate scholarly interest in executive scanning by outlining a model to guide future research on executive search within the context of international strategy. Executive scanning has received considerable empirical attention but only limited theoretical attention. Most of this research has studied scanning as the receipt rather than the search for information. Based on the application of learning theory, we outline a model advancing two broad categories of executive search exploitative and explorative, consisting of six specific search behaviors. We advance search as integral to managerial decisions relating to the various aspects of internationalization, notably choice of location, corporate strategy, and mode of entry. The implications for future research are presented.

At the level of a cognitive schema, a business model is a mental map of a firm’s value-creating, value-delivering, and value-capturing activities and the linkages between them. An important question in the study of business models as cognitive schemas is whether and how schemas differ across industry actors and whether the differences are connected to the variation observed in actual business models in the industry. This chapter examines, in particular, the ways in which business model schemas of industry insiders differ from those of industry outsiders. Using data from interviews with chief executive officers (CEOs) of 30 legal-tech firms, we graphically construct and analyze the CEOs’ schemas of important causal interdependencies between their firms’ activities. The analysis shows systematic differences between insiders and outsider CEOs’ schemas. We theorize that these differences underlie insider and outsider CEOs’ distinct approaches to opportunity recognition, expertise perception, and value framing, and have consequences for actual business model evolution in the industry.

The occupational stress and well-being literature often focuses on specific causes of stress as health risk factors to be managed, on attributes of work environments that are stressful and/or risky, or on prevention and intervention strategies for managing these causes of stress as well as individual stress responses at work (Quick & Tetrick, 2003). The occupational stress literature has not focused on how executives and organizations can cause positive stress for people at work. In this chapter, we explore a principle-based framework for executive action to create positive, constructive stress for people at work.

The first major section of the chapter discusses seven contextual factors within which the principle-based framework is nested. The second major section of the chapter develops nine principles for executive action. The third and concluding section of the chapter turns the focus to a set of guidelines for executive action in managing their personal experience of stress.

Behavioral scientists have long sought to capture how individuals’ understandings, perceptions and beliefs affect their decisions, often through examining the underlying cognitive processes that drive action (Schendel & Hofer, 1979). Economists, for example, are interested in how individuals’ utility functions influence their actions. Marketing researchers investigate how consumers’ preferences are reflected in their purchase behaviors. Organization researchers examine individual characteristics that influence outcomes such as job satisfaction, promotion, and turnover (Aiman-Smith et al., 2002).

In late 2008, a crisis of unprecedented proportion unfolded on Wall Street that called for the government bailout of institutions. Although the crisis wreaked havoc on the lives of firm stakeholders and taxpayers, many of the executives of these rescued firms received bonus compensation as the year closed, which called into question the relationship between pay and performance. Equity compensation is viewed by many as the answer to the principal–agent dilemma. By giving an executive stock in the firm, as an owner, his interests will now be aligned with those of shareholders, and the executive will work to enhance firm performance. Equity compensation was on the rise during the 1990s when stock options became the largest component of executives’ compensation packages [Murphy, K. J. (1999). Executive compensation. Handbook of Labor Economics, 3, 2485–2563]. During the first decade of the new millennium, usage of restricted stock in compensation plans contributed to the executives’ total package. Whatever the form, equity compensation should induce managers to make decisions for the betterment of the firm.

Empirical evidence, however, has contradicted this ideal notion that mangers who are partial owners of the firm work to maximize firm value. Rather, managerial power in the form of earnings management and manipulation of insider information come to the forefront as a means by which executives can maximize the equity portion of their compensation packages. The Sarbanes–Oxley Act of 2002 as well as new accounting rules set forth by the Financial Accounting Standards Board may help to remedy some of the corporate ills that have surfaced in the past. This will not be possible, however, without compliance and increased corporate governance on the part of firms and their executives. Compensation committees must take great care in creating a compensation package that incites the executive to not only act in the best interest of his firm but also consider the welfare of the common good in his actions.

Traditional clinical psychological practices have often been adapted for the context of executive coaching. Cognitive behavioral therapy (CBT) in particular is the most scientifically supported psychological modality. CBT like other practices has been used in coaching as cognitive behavioral coaching but rarely discussed more explicitly for the executive population. Here, we offer a specific adaptation – cognitive behavioral executive coaching (CBEC) – and suggest that it presents a flexible structure that can meet the multiple agendas that are framed for executive coaching. Additionally, the core features of CBT and CBEC in particular satisfy the major needs of executives in coaching arrangements. We conclude by demonstrating a CBEC process model for coaching the high-performing executive.

In this chapter, we review recent work examining the influence individual executive characteristics exhibit on acquisition behavior, often in service of their private interests. In doing so, we outline the findings of this limited research, explore possible alternative explanations and factors, and discuss several novel data collection and methodological techniques that scholars have advanced in the upper echelon context, in recent years. As we discuss, we believe that researchers can more fruitfully explore the underlying personal, psychological, and social factors that motivate acquisition activity, by augmenting current techniques with these methodological innovations.

My study examines the pay-for-performance relationship surrounding executive compensation in higher education. There has been much criticism of the rising levels of university presidential pay, particularly in the public sector, citing it is pay without performance. Public colleges and universities are funded by taxpayers; therefore, their expenditures are even more heavily scrutinized than private institutions. Many feel that university executives are overpaid and are not delivering a return in the form of enhanced institutional performance to their investors, the public. Growing student debt only adds intensity to the outcry against heightened compensation. Proponents of the increasing pay levels contend that the ever-changing role of the university president and competition in the marketplace for talent warrants such compensation. Using data obtained from The Chronicle of Higher Education and Integrated Postsecondary Education System websites, I find a highly significant and positive relationship between compensation for executives at four-year public institutions and both the levels of university endowment and enrollment. These results support the pay-for-performance debate. In contrast, results for other performance measures, scholarships and graduation rates, do not support the debate. My study contributes to the literature examining pay-for-performance in higher education with an empirical analysis examining the institutional determinants of executive compensation for public colleges and universities.