Determine if compensation is reasonable considering the companys financial performance.
Use technology and information resources to research issues in advanced financial management.
· Write clearly and concisely about advanced financial management using proper writing mechanics. Introduction:
· At the risk of repeating ourselves, lets let Mr. Charlie Munger, co-chairman of Berkshire Hathaway, say his piece on the power of financial incentives once more: “Never, ever think about something else when you should be thinking about the power of incentives.” Of course, we agree, and we want you to learn how to evaluate financial incentives that youll discover in the corporate world. We also want you to be able to assess relatively strong and weak corporate governance systems. Thats the crux of this assignment.
· First, what wed like you to do is to identify a public company (preferably one that youre familiar with from prior assignments). Then, wed like you to examine and analyze its governance principles, structures, and practices.
· We firmly believe that the effective financial decision-maker will understand the power that governance and strong systems have over financial performance, and thus its important to train ourselves to be acutely aware of these issues. Heres how we recommend approaching the assignment: o Head to edgar.sec.gov to access your companys financial statements (or any site where you feel comfortable accessing your companys financial statements, including the companys own homepage). o Pull up the proxy statement (its also called the 14A, the DEF14A, and occasionally the PRE14A). o Read the statement in its entirety and reflect.
Write a 3-4 page paper in which you do the following: 1. Determine whether the board seems appropriately constituted. Are these people qualified to be governing a business of this type? (Read their bios and even Google them for more info.) 2. Assess the committees the board members sit on. Are they appropriately staffed? 3. Assess the management. How long have they been with the company? What is their relative experience? 4. Evaluate the boards philosophy on executive compensation. 5. Discuss the metrics tied to the CEOs inventive compensation. Are they sound metrics or not? Determine if compensation is reasonable considering the companys financial performance. 7. Determine if related-party transactions (sometimes called “transactions with related parties”) exist, and if they do, whether they are reasonable. Your assignment should adhere to these guidelines:
· Write in a logical, well-organized, conventional business style. Use Times New Roman font size 12 or similar, double-space, and leave ample white space per page.
· All references and works must be cited appropriately. Check with your professor for any additional instructions on citations.
· On the first page or in a header, include the title of the assignment, the students name, the professors name, the course title, and the date. Title and reference pages are not included in the assignment page length.
· Faculty have discretion to penalize for assignments over or under the assignment guidelines. Check with your individual professor if you feel the assignment requires a much longer or shorter treatment than recommended. Grading for this assignment will be based on answer quality, logic/organization