Executive compensation. Challenges after the 2007-2009 Crisis

The corporate practice of managerial compensation in recent years gives rise to the thorough consideration of effectiveness of this motivational mechanism in joint stock companies. The examples from before the crisis of granting high remuneration packages and sometimes the glaring lack of connection between executive pay with company performance contributed to the interest in new solutions in this area. Though at the beginning of the discussion about the future of managerial compensation, the dominating factors were indignation and willingness to reduce remuneration considerably; this approach gave way to serious reforms and proposals for the improvement of the situation. The debate on the amount and structure of executive pay has been carried out for a long time and is the subject of many interesting empirical studies that use the latest statistical and econometric tools. However, the major subject of debates focuses of two basic groups - authors appealing for stricter control of executive pay and limitation in the amounts as well as researches and practitioners pointing to the significance of market mechanisms in the process managerial compensation construction. The solutions suggested recently are placed in between these extreme approaches and constitute an important element of the improvement of supervision systems.