Literature Review of Corporate Governance and Dividend Policy Dissertation

Literature Review of Corporate Governance and Dividend Policy - Dissertation simulationThe global economy is confronting with an earning conflict because of excessive managerial remuneration in major enterprises throughout the world. To investigate on the perpetrators of economic recession, the high managerial salary and extreme risk taking activities were cited as prime suspects. Among the two issues, the managerial pay leads to the primary focus and incited many public as well as political outrages. For instance, the insurance major named AIG was nearly shattered because of bad business performance and abundant remuneration scales. It was seen that AIG had paid almost 165 million USD of indemnity amount to 400 employees in London. In Wall Street, the bankers gave themselves almost 20 billion USD as bonus in the year 2008 even when the economy was decelerating down. The political science also expended huge money to assist the financial institutions. It was alleged that this type of ignorance for the expenditure and the outcomes of the managers actions have generated the economic crisis. The ethnicity, customs, spawned managerial remuneration plan with incentive that fight the unnecessary risk taking had given light to the economic crisis. The laws and regulations along with corporate boards were highly criticized for autonomous management of organizations. (Thompson, 2009). Excessive Managerial Remuneration in the USA Several reports stated that excessive managerial remuneration in the USA has taken overwhelming economic levy in American guild and intimidated the control in corporate sector, government and nonprofit area and created volatility in the economy. It has been observed that average employees in the USA need to clip hard for a whole year to generate one days salary of most of the CEOs listed in the Fortune 500. The gap between the lowest and maximum salary was extending. This salary inequality has endangered the basis of the USA democracy, mana gement, and produced situation for financial instability. According to the report of United for a lovely Economy (UFE), the CEOs in the big companies get almost 10.8 million USD as total remuneration, which is 364 times higher compared to the average American employees. The amount excludes the cost of bonuses and stocks and if include the amount will increase to a