Accounting Theory for Executive Compensation Accounting information is an important measurement for executive compensation, especially in the wake of widespread challenges associated with the current global economic crisis. The interjection of accountants in the process of both determining the right type of compensation packages for executives and in applying analytical tools in the allocation of funds is becoming all the more necessary. This is because of the fact that, as Bebchuk and Fried note, “flawed compensation arrangements have been widespread, persistent, and systemic, and they have stemmed from defects in the underlying governance structure” (ix). This paper will serve to explore the broad intersection of accounting theory and...The end:
.....y national and international regulations, but also to ensure that executive compensation packages will allow the firm to remain sustainable over the long term. References Bebchuk, L.A. and Fried, J.M. Pay without Performance: The Unfulfilled Promise of Executive Compensation. UC Berkeley: Boalt Hall, 2004. Bowen, R., Rajgopal, S., and Venkatachalam, M. “Accounting Discretion, Corporate Governance, and Firm Performance.” Contemporary Accounting Research 25.2 (2008): 351–405. Carter, M.E., Lynch, L.J. and Tuna, A. “The Role of Accounting in the Design of CEO Equity Compensation.” Accounting Review 82.2 (2007): 327-383. Jensen, M. and Murphy, K. "Performance Pay and Top-Management Incentives." Journal of Political Economy 98.2 (1990): 225-258.