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"Shaping the Debate on Executive Compensation"


April 10, 2007 6:00pm - 8:30pm


This is the second of two multidisciplinary seminars on corporate governance offered by Stanford Business School and Law School faculty. Few contemporary business topics are more controversial than executive compensation. Many pundits, legal scholars, regulators, activist investors, and researchers have very strong opinions that there is something wrong with the way the U.S. executives are paid. This is an important and politically charged debate and the outcomes will almost certainly have a substantial impact on national productivity, innovation, and value creation.

The seminar will review why compensation arrangements exist, how typical contracts are structured, and what we know from the extensive research on executive compensation.

An interactive discussion with Professor David F. Larcker, the James Irvin Miller Professor of Accounting and Co-director of the Rock Center for Corporate Governance, will separate some of the unsupported rhetoric from the actual facts. In order to provide insight into the difficulty of designing compensation plans, you will develop a plan for some actual corporate executives. Bring your knowledge, biases, and best guesses regarding compensation. Be prepared to engage in the debate!

Professor Larcker's research focuses on executive compensation, corporate governance, and managerial accounting. His work examines the choice of performance measures and compensation contracts in organizations. He has current research projects on the valuation implications of corporate governance, role of the business press in the debate on executive compensation, and modeling the cost of executive stock options.