Examine the role of, and relationship between, executive compensation, hostile takeovers, and share price in corporate governance in Australia, US, UK, Germany, and Japan

The Role of , and Relationship , Between Executive Compensation , Hostile Takeovers , and Share Price in Corporate Governance in Australia , US , UK Germany , and Japan

Corporate governance in Australia and the U .S , among other countries , has been in the limelight because of scandals that involved such companies as OneTel and HIH Insurance in Australia and Enron and WorldCom in the United States (Fleming , 2003 : 195 . Naturally , the remuneration given to top-ranking corporate officials , such as the CEO has also become a popular . It is therefore fitting to examine the connections between executive

compensation , hostile takeovers , and share price in relation to corporate governance in various countries

In the principal-agent connection between the owners of a business and the managers , there is a possibility that the executive officers will take advantage of their power for their own financial advantage and not necessarily for the benefit of the company (Fleming , 2003 : 196 Also , Jensen and Murphy (1990 : 3 ) believe that political forces can inhibit the establishment of an ideal contract between shareholders and top executives by limiting the kinds of agreements that could be written . On the one hand , the public have criticised apparently very high salaries for executives , thereby putting a cap on the pay that could be offered . Meanwhile , forces in the labor market prevent substantial reductions to the pay of the executives when they fail to achieve the required performance . Thus , the pay for top executives is kept within a certain range and the supposedly ideal premise of setting...