The Misfit and the “Miss-Fit”

Lewis, Anthony Dr. Sherry Forkum English 1A, Midterm 13 March 2013 The Misfit and the â€Å"Miss-Fit† Flannery O’Connor is an author who has written a score of short stories; however the author is remembered for one story in particular. The story revolved around a family that had problems just like any other normal family. This family’s problem was respecting each other and communication. The Family is taking a vacation to Florida when a longing for a stroll down memory lane hits the grandmother, who wants to see a house she had been to before.As the family approaches its destination, an accident takes place that leaves the family stranded on a dirt road where they meet the Misfit, an escaped convict from prison. The misfit would have helped the family out in getting the car working again, but the grandmother had to say â€Å"You're The Misfit!†¦ I recognized you at once! (O’Connor, Flannery  ¶81)†, getting the whole family massacred because the Misfit could not have any witnesses able to report a location of his whereabouts. Although this story sounds straightforward, there are some ironic twists discovering who the real Misfit of this story is for example.In O’Connor’s short story, A Good Man is Hard to Find, O’Connor writes to depict the true â€Å"miss-fit† in the story to be the grandmother. Red Sammy and his wife were symbolic of the best of mankind. The couple was the epitome of what normal citizens would call good-natured people. Red Sammy gave assistance to a couple of gentlemen that needed gas. When the guys told Sammy a bit about themselves, Sammy gave them a helping hand, and generously offered to give them gas on credit. The gentlemen stiffed Sammy the money they owed him and gave indecency in return. The grand-mother, Red Sammy, and his wife discuss the evil nature of the times and decide that, although they themselves may be good people, ‘a good man is hard to find. †™(â€Å"O'Connor's Short Stories: Summary and Analysis: â€Å"A Good Man Is Hard to Find†Ã¢â‚¬   ¶12)† On top of being a very generous man, Sammy also symbolized a sort of warning for the family. â€Å"I felt ‘Red Sammy' represented a type of prophet in the story, speaking to the Grandmother directly about how trust was becoming dissolute †¦. He was the family's ‘red flag (Lucy Tonic  ¶ 12)†.All the talk of dishonest people is extremely ironic since the family gets into an accident and find out that help was found in none other than the Misfit and a couple of other convicts. In A Good Man is Hard to find, Bailey and his wife were not the two most powerful people in this story, they are very easy to manipulate and they let people walk all over them. They did not even have a large role to play in the story. Their characters were put in the story to build suspense during the conversation between the Misfit and the grandmother.This build up l et the readers feel like the grandmother may have a chance to be spared. â€Å"It's not far from here, I know,† the grandmother said. â€Å"It wouldn't take over twenty minutes. † Bailey was looking straight ahead. His jaw was as rigid as a horseshoe. â€Å"No,† he said (O’Connor, Flannery  ¶48-49). This man is letting his kids behave like little brats allowing them to scream and yell for far too long before he whips the car to the side of the road to yell at the kids to shut up. Although the parents may have been incompetent in raising their children they, like their infant child, should not have had to suffer their fate.The children in the story, although obnoxious and completely disrespectful to all the characters, also play a role that is inherent behavior to most kids. Kids have mostly acted with bad manners and disrespect in the past because the lesson has not been learned that respect is essential to living in society. It is the responsibility of the parents to teach the meaning of respect and general manners to children. June Star, the daughter of Bailey and the mother, is a downright disrespectful little brat that needs to be taught the most about manners and appropriate comments to strangers.The girl has no boundaries in place because it is obvious the parents do not have a discipline routine, and the parents just get rolled over by the children. â€Å"Though she's cute, she's just plain nasty to everybody, as learned pretty early on in the story from the way she treats her grandmother (â€Å"June Star. †  ¶1)†. John Wesley, the son of Bailey and the mother, is similar to June Star however not as ruthless a character. This is because between the Grandmother and June there is little time to be on the same playing field in respect to cold-heartedness.The baby is by far the most innocent character in the story. This is because the baby is still a newborn that does not have the brain development to act based on its current knowledge. â€Å"The baby's sleeping when it's shot†¦it's the easiest member of the family for whom we feel sorry (â€Å"The Baby†  ¶1)†. This is because the baby never even had a chance and died all because the Grandmother made an idiotic comment to a convicted felon ensuring the family’s fate. The Misfit and his posse are a small group of outlaws who broke out of jail and are attempting to remain hidden from the authorities.Albeit an individual who is looked down upon by society for committing heinous crimes, throughout the story the Misfit plays the role of a convict with a sense of acceptance towards being a bad man. â€Å"If He did what He said, then it's nothing for you to do but thow away everything and follow Him, and if He didn't, then it's nothing for you to do but enjoy the few minutes you got left the best way you can by killing somebody or burning down his house or doing some other meanness to him. No pleasure but meanness. (à ¢â‚¬Å"A Good Man is Hard to Find†  ¶136)†This illustrates the Misfit’s persona and shows that he does not care about taking another’s life in order to give his life a purpose. Due to the behavior and the overall actions, the Misfit fit the role of the convict character therefore could not be considered the true misfit. Throughout the conversation with the grandmother, the Misfit seems to be a polite gentleman regardless of his misdeeds. â€Å"†I'm sorry I don't have on a shirt before you ladies,† he said, hunching his shoulders slightly (O’Connor, Flannery,  ¶100)†.This shows that he is not a terrible person and he probably just got caught in the wrong place at the wrong time, but at this point he has accepted his fate as a bad man on the run. The Grandmother, not ever mentioned by name in the story, is the absolute shadiest character of all. The Grandmother has this holier than thou attitude that could not be more wrong. Not o nly is the she hypocritical but also a master manipulator as well. The Grandmother tries to get her way by sing news clippings of the Misfit’s escape as a reason that the family should take a trip to Tennessee instead of Florida. â€Å"The grandmother says that ‘[she] wouldn’t take [her] children in any direction with a criminal like [the Misfit] aloose in it. [She] couldn’t answer to her conscious if [she] did. ’ Ironically, this is exactly what she does when she tempts her family into visiting the old house (Krista  ¶36). † Although the Grandmother’s initial idea of taking the trip in Tennessee would have been better, the intentions of going to Tennessee, however, were strictly selfish.She manipulated the kids into thinking that there was a house with secret panels that held untold amounts of hidden family treasure so that Bailey would turn the car around to go and visit the old house. This action was the final straw that led the f amily down a road that would lead them directly into the path of the Misfit. As the family drove down the dirt road that led to the house with the â€Å"treasure† the senile old lady suddenly came to the realization that the house the family was driving to, was not in Georgia, but in Tennessee instead. The thought was so embarrassing that she turned red in the face and her eyes dilated and her feet jumped up, upsetting her valise in the corner. The instant the valise moved, the newspaper top she had over the basket under it rose with a snarl and Pitty Sing, the cat, sprang onto Bailey's shoulder (O’Connor, Flannery  ¶63)†. The Grandmother freaked out causing Bailey to drive off the road and flip the car around. Throughout the story all of the characters commit actions or make comments that make everybody in the story sound insane. The Misfit and his gang all commit atrocious crimes and have no remorse about committing those crimes.The children both act like spa wns of Satan, throwing temper tantrums to get what they want, being disrespectful to others and to the family as well. Red Sammy and his wife, is a couple that is very rapidly losing hope for all people in the world thinking that there is no decency left in mankind. The Grandmother, however, takes the cake so to speak on being in denial about who she is as a person. She thinks she is above the rest of the characters in overall behavior as far as common courtesy. This makes her the worst character in the story because she is an evil character that hides behind this facade of a good person.Works Cited â€Å"The Baby. † Shmoop. Shmoop University, Inc, 2013. Web. 13 Mar. 2013. . â€Å"June Star. † Shmoop. Shmoop University, 2013. Web. 13 Mar. 2013. . Krista, Emily, Rach, Nick Light, and James Leonard. â€Å"A Good Man Is Hard to Find. † Analysis of Flannery O'Connor's Short Story. Debra Bell, 8 Oct. 2009. Web. 13 Mar. 2013. O'Connor, Flannery. â€Å"A Good Man Is H ard to Find. † A Good Man Is Hard to Find. N. p. , n. d. Web. 13 Mar. 2013. lt;http://pegasus. cc. ucf. edu/~surette/goodman. html;. â€Å"O'Connor's Short Stories: Summary and Analysis: â€Å"A Good Man Is Hard to Find†Ã¢â‚¬  Cliffs Notes. Cliffsnotes. com, n. d. Web. 14 Mar. 2013. ;http://www. cliffsnotes. com/study_guide/literature/oconnor-short-stories/summary-analysis/a-good-man-is-hard-to-find. html;. Tonic, Lucy. â€Å"Analysis of Flannery O' Connor's â€Å"A Good Man Is Hard to Find†Ã¢â‚¬  Yahoo! Voices. Yahoo! Contributor Network, 17 Aug. 2012. Web. 14 Mar. 2013. ;http://voices. yahoo. com/analysis-flannery-o-connors-good-man-hard-11673144. html;.

Quartering Act of 1765 Essay

The terms of the quartering act of 1765 were that each colonial assembly was directed to provide for the basic needs of soldiers stationed within its borders. The quartering of soldiers in colonies caused a huge controversy and played a huge part in the start of the American Revolution. The colonists did not like the formal soldiers of the British. They preferred to have militia men which were soldiers of the colonies. Also, they did not have the money for all that fancy stuff anyway so they stayed basic and they did not like how the British wanted to change them. New York was the heaviest resisters of the quartering act. On January of 1776 the assembly showed that they were by refusing to pay the full amount to the crown. The British did not let them have soldiers until they paid the full amount to the crown and even though we ended up paying that left a mark with the colonists. When 1500 British soldiers came to the New York provincial assembly and when the colonists refused to pay them, they went back on their ships and stayed. The Quartering act played a huge part in the American Revolution because it was one of the things that helped America realize why we didn’t even need the British. Even though this act expired on March 24, 1767, there ended up being a new quartering act. This one of the intolerable acts that the colonists couldn’t stand, and everyone knows that everybody has his or her breaking point and this act may have triggered that. The biggest reason why this was a problem in the colonies is that the quartering act was basically a tax for no reason. The colonists had to give money; food and shelter for protection for people that they didn’t even think were a threat to them. I feel that the quartering of soldiers was kind of stupid and not even necessary. What is the point of the colonists feeding the soldiers when the British are beyond wealthy? The Quartering act of 1765 will always be remembered as one of the biggest factors in why the American Revolution happened. The British could have Easley avoided all of this if they would have just started being fair with the colonists instead of trying to make them pay the money they don’t have on something the British can do themselves. If the British would have never taxed for military support I honestly don’t think the war would have gone so out of hand or even happened at all.

Computer Information System Essay Example | Topics and Well Written Essays - 750 words

Computer Information System - Essay Example Organizations can't survive with working in international markets with out the help of databases and computers. In an environment where competition is tough they need to carry on communications with the help of computers and keep records on databases. As more and more people turn towards environment friendly products due to awareness, organizations are compelled to turn their attention towards product of the kind that are environment friendly. Organizations got to know about this by the help of databases that showed these trends according to the records. The most important use of databases in business is to keep a track record of history about the business. This not only helps in formulating strategies by studying the past trends but also helps executives in making important decisions that are related to the organizations. A database keeps the record in relevance to its dependency and gives results that are used to deduce conclusion as to why and how something happened. For example a drop in sales due to the packing of a product might be missed by a manager, but the database can easily point it out by showing that the drop in sales started as soon as the packaging of the product was changed. As I mentioned above the reasons for using databases to conduct day-to-day operations of a business, the same case is in my organization. We use databases in order to have an edge over our competitors, to become reputable in our sector of the business and to earn profits. Reasons apart from these are also related to the implementation of databases, these include satisfying the customers to the maximum in order to enhance the business operations and to keep a track of the customer so as to study the trend of his or her behavior that helps us in giving the customers what they really want. Our organization uses the one of the most successful database application, which is easy to implement and user friendly for the employees. The name of the database application is Oracle. This software is being used widely by organizations all over the world to help in running successful business. The main function of this database application is to enable the workers here to store, change and manipul ate data in the database using queries. The database application gives us the added advantage of comparing data and suggesting future trends, which helps the organization in formulating perfect strategies. The users are first trained to handle the database though its easy but our firm makes sure that all the people interacting with the database through the database appl

Health and Safety 1 Assignment Example | Topics and Well Written Essays - 2250 words

Health and Safety 1 - Assignment Example Principal contractor's legal responsibilities for notifiable projects: Monitor and oversee construction while coordinating with the contractor. Prepare and implement a plan for the project and site rules. Share relevant portions of the plan with contractors. Provide suitable welfare facilities available on site before beginning work on site, and maintain them through the project. Check competence of all parties appointed by him. Ensure dissemination of all needed information to all workers. Consult with workers before and during work on site. Assist CDM co-ordinator by liaising with him on design. Ensure security of site and safety of all workers on site. Contractor's legal responsibilities for all projects: Monitor and oversee own performance as also that of workers on site. Assume responsibility for competence for their employees. Training of their employees Providing information to their workers to enable maximum productivity and quality. Comply with requirements as set out in Part 4 of the CDM regulations document. Provide good and adequate welfare facilities for own workers. Contractor's legal responsibilities for notifiable projects: Check whether the client is aware of his own duties, and whether a CDM coordinator has been appointed and HSE notified prior to beginning work. Cooperate and coordinate with principal contractor while planning and executing work, as also setting down site rules and reasonable directions. Provide details pertaining to the work to any contractor engaged in the project, including the principal contractor. Provide information for the health and safety file whenever required. Give feedback on the plan to the principal contractor, identifying and pointing out any problems. Inform the... The main provisions outlined within the document and their introduction by project management is as follows. These are common for both MHSWR 1999 and CDM regulations, 2007, differing in scope and resultant measures: Encourage all involved (Client, design team, contractors and workers) to work towards the seamless integration of safety and health issues into the process of building construction. This has been made possible by introducing the CDM coordinator who makes compliance possible through extensive pre-project coordination between all concerned. Reduce and eliminate hazards through better planning and management from the start of a project. As the client responsibilities have been more clearly defined, it is in the clients best interests to involve designers and the contractors to identify and reduce hazards before actual construction starts, thereby reducing project creep through efficient project management and time lines. Effective targeting of effort to maximise health and safety improvement outcomes.

Symbolic interactionism Essay Example | Topics and Well Written Essays - 500 words

Symbolic interactionism - Essay Example Based on the relationship between the individual and the society, symbolic interactionism brings the issue of coordinated management of meaning. Individuals in a communication process tend to construct social realities of the world they create to shape them. The definition and management of meaning to reflect reality is a two-way process that is enhanced by effective communication. The things that individuals say matter because they are a reflection of their thoughts and implications of reality. Symbolic interactionism succeeds in the social perspective when people cease to violate the interpersonal expectations of other people and work towards conformity. Even when the definition of social interactionism was being made, the modern ways and theories of communication were still in place. Only those philosophers had not identified them, or none had talked about them openly. For instance, the theory of social penetration applies all the time in the communication process, whether or not the communicators are aware of the existence of the theory. At the same time, in order to socialize and interact in a healthy manner, symbolic interactionism only reflects the reality it claims to symbolize when there is a reduction of uncertainty in the socialization process and pathway. It is through the reduction of uncertainty that people can socialize and share experiences that are foundations for the formation of friendship. In any social perspective, there must be contradictions and understandings between people based on their symbolic understanding of reality, as coined by the philosopher and his students. Although people believe that they have the right to control and make their information confidential, social interactions require sharing of information and ideas as one of the primary ways of the development of friendship. The continuous aspect of communication and

The Water Retention Landscape of Tamera Essay Example | Topics and Well Written Essays - 1250 words

The Water Retention Landscape of Tamera - Essay Example The creation of this innovative large water preservation space will get Tamera much nearer to the full apprehension of the water landscape as original envisaged in 2007, by Austrian perm culture specialists. During their earliest visit to Tamera in March 2007, they drafted a map for how an arid land similar to that in Tamera could be changed into a fertile and productive landscape with plenty of water. In spite of the lengthy summer droughts, there is certainly no scarcity of rain over the entire year. The only crisis is that it falls about wholly in winter, where it can hardly penetrate the earth and swiftly flows away, leading to erosion and overflowing or flooding downstream. The vision specialists offered to Tamera for a water landscape comprised of at least ten rain-water preservation spaces of different sizes, enclosed by perm culture terraces and healthy assorted woodland – an edible landscape (Holzer, & Mà ¼ller, 1). This vision was originally met with some cynicisms from the Tamera society. However, when the high amount of capacity of the  water that falls annually in the catchment region surrounding Tamera was in fact calculated, the change from thoughts of scarceness to pictures of abundance effortlessly followed, and Tamera willingly accepted to work with the specialists to create such an ideal water landscape model for the whole world and Portugal in particular. Just a few months afterward, in August 2007, the construction of ‘Lake 1’ begun.

Advantages of using a team to develop and complete a presentation Essay

Advantages of using a team to develop and complete a presentation - Essay Example Collaborations utilizing the talents and wisdom of knowledgeable persons provide the presentation with a higher level of credibility and in-depth informative aspects far beyond what a single perspective and solitary voice could offer to the audience. It is commonplace in today’s high-tech society for presentations to be produced and delivered by means of a group effort rather than by an individual. It has been found to be much more effectual for numerous associates to speak instead of just a single person speaking for the entire organization or group. A presentation is broken up into several sections with each requiring a specialized knowledge base which is more effectively addressed by an expert in that particular area. One person can hardly be considered the most knowledgeable within an organization regarding every aspect of a complex subject or project. In addition, the audience retains more interest for a longer period of time if the presentation is broken up with differing speakers. When team members speak only on what they know best, this not only allows for a more informative presentation but does not put the burden on one person to speak about unfamiliar aspects of the subject. Each member is confident with their part and thus at ease with the material unlike a single person attempting to cover everything, a confidence which is openly conveyed to the audience. Group presentations also serve to present a cross-section of the organization’s employees instead of viewing just one representative, a major selling point to the intended audience (Friedmann, 2003). Team presentation offers a heightened level of attention for the audience as they are presented with a variety of speakers. When practiced well, the presentation flows more smoothly and coherently with a group effort because, for example, one person might be given the task of operating visual and or audio aids while another focuses on speaking to the audience.

An audit of current provision and critical reflection of the Learning Essay

An audit of current provision and critical reflection of the Learning Environment where intervention groups are currently conduc - Essay Example However, the effectiveness of this initiative has remained an issue of concern to a good number of modern scholars and policy implementers in the United Kingdom (Hayward, 2006, p. 257). Although the term inclusion is not a legal concept, the term is used consistently in primary schools and many middle level schools to educate professionals and community members on the significance of supporting people with disabilities to perform effective in formal and informal education system. In most instances, inclusion programmes differ consistently both in terms of implementation and definition in different schools and societies. Some variables, such as the nature and amount of support and school infrastructures, differ from child to child, school to school and from one country to another. As defined by global scholars, inclusion entails a situation where pupils with disabilities are trained in regular education classroom using the available resources on fulltime bases (Evans, 1989, p.910). Di sabled students therefore become part of the entire education systems, and therefore, they consistently participate in all areas of classroom culture. In inclusion programme, students are expected to effectively participate in various activities such as in library activities, assembly’s activities, lunchtime activities, arts activities, in physical education and in playground activities. Inclusion has its root cause in Civil Rights Movements in United Kingdom and United States of America (DFES, 2005, p. 245). The hypothesis behind the introduction of this policy was that separate training and education among children with disabilities failed to provide an overall solution to the problems that affected disabled people. Therefore, in order to attain equal access to education facilities, children with disabilities ought to be educated in the same training institution and system with children who do not have physical and mental disabilities. Purpose of inclusion for pupils with S END A good number of modern scholars have written different publications with an aim of explaining some of the main benefits of inclusion education among disabled children. However, based on the available facts, inclusion education offers an authentic learning environment among disabled children in primary schools. This benefit is based on the assumption that at one time in their lives; children with disabilities will become part of the general society. Therefore, they ought to interact with other people in order to understand the society’s norms and regulations. In interacting with community members, children who do not have disabilities will encounter people with disabilities, and therefore, effective interaction at the initial development stage will offer an avenue that will train them on some of the most effective means of dealing with physically challenged people. Therefore, in the attempt to foster competence and understanding instead of fear, it is important that child ren be exposed to people of all abilities and disabilities in their initial training. The creation of a learning environment that have microcosm of the society and that include people from all lifestyles including physically challenged people is very essential and critical in enhancing students’ future activities and performances (Kochhar, West & Taymans, 2000, p. 89). In addition, inclusion programme offers an opportunity for students to be exposed to various learning and training methods on a

Discussion M4 Essay Example | Topics and Well Written Essays - 250 words

Discussion M4 - Essay Example Alternatively, they liaise up with a re-known grocery store in the neighborhood and make direct orders should they require food supply. Most airline companies like designing containers that carry the foodstuffs with their own specifications. Therefore, this influence the warehouse requirements in that they have to locate it near or in the airport for easy packaging, branding, and reduce labor and transportation costs. Demand-facing warehouse requirements is a primarily dependant on customer preferences and tastes. The airline company will be tasked to construct a warehouse and store relevant food stuffs in accordance to demand so that it avoids running out stock. Alternatively, it can link up with suppliers to make sure there is a fresh delivery each time there is need. Through Just-In-Time approach, the company can avoid piling up inventory that can go to waste or lead to high storage costs. Foodstuffs meant for human consumption should be delivered fresh and of right quality. This is a standard requirement by the public health departments to avoid chances of food poisoning. In addition, since it is not the main business for airline companies, avoiding keeping food stock can be important in reducing storage costs and creating space for other important

Shakespeare’s Othello Essay Example for Free

Shakespeare’s Othello Essay Answer to Q.# 1: The first scene of Act I serves as a part of exposition of a play. It acquaintances us with the major characters and situation and indicates its theme. In Othello Iago’s evil intention and conspiring nature is revealed, as much as his hatred for the Moor who denies him the promotion and chooses for his lieutenant an arithmetician, â€Å"a bookish theoric† (1.1.24) So the Iago’s motive for villainy is revealed to the audience. Then the rest of the story is his single-minded pursuit of Othello’s ruin by poisoning his mind with jealousy as he confesses to Roderigo that he is one of those who â€Å"Keep yet their hearts attending on themselves,/ And, throwing but shows of service on their lords. †(1.1.51-52) His cold-blooded nature and plan of relentless revenge are clear from his speech: â€Å"I follow him to serve my turn upon him;†(1.1.42) He also suffers from a sense of injured merit when he says, â€Å"I know my price, I am worth no worse a place;† (1.1.11) and bemoans the fact that â€Å"Preferment goes by letter and affection,/ Not by old gradation.†(1.1.36-37) His dissembling nature is exposed: â€Å"I am not what I am.†(1.1.65) The theme of Othello’s tragedy due to   Iago’s slow-poisoning of his mind is well illustrated here. Answer to Q.#.3: Being gullible, Othello becomes a puppet in the hands of the villain who he calls â€Å"honest† Iago. Stung by obsessive jealousy, Othello determines to kill his beloved Desdemona on the ground of unfaithfulness. But a   hesitating Othello stands watching sleeping Desdemona. When invited to bed, he kisses her and   tells her to say her prayer so that her soul goes to heaven after death. In every way Othello proves himself a lover – though a confused headstrong one. His self assessment is succinctly expressed which seems quite fair: â€Å" one who lov’d not wisely but too well.†(5. 2.344) In spite of his passionate love for his wife, Othello kills her because of his uncontrollable jealousy. He abstains from spilling her blood and cannot bear killing her in light. As Desdemona pleads innocence he smothers her to death. When Emilia confesses to stealing her handkerchief at the behest of Iago, Othello discovers his blunder is too late to mend; yet he stabs himself   as punishment.

Executive Compensation and Stock Option in the UK

Executive Compensation and Stock Option in the UK 1 Introduction Todays highly competitive world consists of numerous corporations and these corporations are so huge and so large that it cannot be controlled by the people who own them. The control of these corporations is separated from shareholders who are the owners and vested into the hands of professional executives who are specifically hired for its management. This separation of ownership and control gave rise to agency problem or the principal-agent problem. Principal is referred to the stockholders and the agents are the executives who work for the stockholders. Although stockholders are the owners of the company to whom the executives are accountable, their actual powers are restricted except in the case of those corporations where stockholders are also the directors of that corporation. Stockholders have no right to inspect the books of accounts nor are they aware of the exact functioning and position of the firm. As a result, executives tend to work inefficiently without even bothering to look for profitable new investment opportunities, as well as they may use the firms assets for private purposes and also work to achieve their personal goals all at the expense of the shareholders. Some managers do not take any action whatever state or condition the corporation may be as they are risk averse and fear the threat of losing their job if a decision taken by them goes wrong. Therefore in order to avoid the various problems that arise due to the agency problem, executives must be properly and promptly compensated along with proper monitoring. In the beginning of 1990s, debates on corporate governance mainly focused on directors remuneration and fat cats. Fat cats are referred to those executives who provided themselves with huge compensation packages without any performance criteria. In UK, the most famous Fat Cat episode which saddened the shareholders of many large public companies and dragged the attention of the media was the notorious British Gas incident of the mid 1990s. Various issues arising out of executive compensation and the trouble of framing the deserved level of compensation, that has to be provided to an executive, made executive remuneration a main area of concern under corporate governance. According to Jensen (1993), providing the right level of remuneration to the executives and creating positive incentives in order to achieve the interest of the shareholders has been an important study conducted in many academic literatures. An improvement in corporate governance is brought about by filtering certain aspects of executive remuneration. There exists a wide gap between the remuneration paid to the executives and the remuneration paid to the other employees on the company. This gap keeps on increasing year after year as executives demand more and more for their services and decision making process to boosts the productivity and reputation of the firm which thereby increases the market price of the companys share. In a research mentioned in the Higgs Report (2003), chairmen of FTSE 100 companies in 2003 earned an average of  £ 426,000 as remuneration. Moreover, executives are being rewarded with stock options which would enrich them with abnormal profits in the future when the options granted to them are exercised. Critics argue that, executives are not worth for the remuneration paid because of their poor and unsatisfactory performance. According to Blitz (2003), MORI a leading market research company in the UK, through a survey, found 78% of the people unsatisfied by the remuneration paid to the executives. The pu blic in UK believe that executives are being overpaid for the amount of work they actually do. 2 Methodology This paper is a critical review on the various aspects of executive compensation in the UK and how the executive compensation especially the executive stock option encourage the managers and top executives, for their personal benefit, to take short term high risks and boost up the current value of shares rather than looking into the future and acting in favour of the stakeholders of the company. The tools used for the research mainly consist of various literature reviews of past articles and current working papers with some analysis of some statistical data regarding executive compensation. On the basis of the above mentioned area of research certain questions have been framed which will be critically looked into: a) Brief description of the executive compensation and corporate governance in the UK. b) Basic structure of executive remuneration in the UK and their disclosure requirements in United Kingdom. c) Are stock options considered the best means of remuneration in an executive compensation package? d) A brief historical overview of the introduction of executive stock option in the UK. e) What are the various manipulations done with executive stock option and what are the risk incentives created by executive stock option? f) Brief comparison of the UK executive compensation with the US executive compensation. g) The role of executive compensation in the UK banking towards the current financial crises. 3 Executive Compensation and Corporate Governance in the United Kingdom: During the past decade, various issues on corporate governance established the emergence of many reports and codes of best practice in the United Kingdom. These include the Inland Revenue (1988), Cadbury Report (1992), Greenbury Report (1995), Hampel Report (1998), The Combined Code (1998), Hermes Statement on Corporate Governance and Voting Policy (1998), Internal Control: Guidance for Directors on the Combined Code (Turnbull Report)(1999), Company Law Reform (1999) and Financial Services Market Act (2001) (Konstantinos Stathopoulos, Susanne Espenlaub, Martin Walker, 2003). Among these reports the Cadbury Report, Greenbury Report and the Combined Code, which emerged from the Hampel Report, focused on issues regarding executive compensation. 3.1 Cadbury Report (1992): The first guidelines of good practice on various issues of corporate governance were provided in the year 1992 by the Cadbury Committee which was established in May 1991 and was chaired by Adrian Cadbury. The Cadbury Committee discussed issues that were broader in nature than the executive remuneration but certain suggestions the committee made on altering the executive pay was accepted as permanent. The Cadbury report was titled as the Financial Aspects of Corporate Governance and came out with the Code of Best Practice, which insisted that decisions based on executive remunerations should not be made by the executive directors nor they have to get involved in making such a decision (1992, paragraph 4.42 p. 31). The report therefore recommended the appointment of a remuneration committee which will act in the interest of the shareholders of the firm and express a good opinion on various matters regarding executive compensation to the board. Companies in the UK responded spontaneousl y to this recommendation made in the Cadbury Report and established a remuneration committee within the firm (Bostock, 1995). The remuneration committee consists of a non-executive director as the chairperson and non-executive directors as its members who are all independent and free from the influence of the management. According to Williamson (I985), there always arises a question of doubt whether the directors make remuneration contracts for their own huge benefits and sanction it, if an independent pay committee does not exist. The role of remuneration committee is to ensure that executive compensation levels are set up in a formal, transparent way along with the goals required to be achieved by the executives for any schemes that are performance related. The remuneration committee can take advice from outside sources whenever necessary. The Cadbury report also suggested the establishment of an audit committee within each company which comprises of three non-executive directors (Martin Conyon, Paul Gregg and Stephen Machin, 1995). According to a questionnaire survey conducted by Conyon and Mallin (1997), by 1995, 98% of the companies followed the suggestions made by the Cadbury report and has reported the involvement of the remuneration committee in their annual reports. 3.2 The Greenbury Report (1995): Cadbury report failed to provide detailed guidance on how compensation packages have to be structured. However, it pointed out executive compensation to be the main area of study for the next committee known as the Greenbury Committee. The Greenbury Committee chaired by Sir Richard Greenbury, was formed by the United Kingdom Confederation of Business and Industry, and in 1995 it submitted the Greenbury report which dealt with matters regarding the determination and accounting of top executive pay. The main issues discussed in the Greenbury Report includes the role of the remuneration committee in an organisation, the disclosure requirement required by the shareholders of the organisation, the remuneration policies for compensating the executives and the service contracts provided to the executives. The remuneration policies recommended in the Greenbury Report are: a) Compensation packages must be provided by the remuneration committee to quality executives in order to influence, sec ure and encourage them and any payments extra to this intention must be avoided (Greenbury Report Paragraphs 6.5 – 6.7). b) The payments made and the subsequent resulting performance by other companies in the same industry must be evaluated by the remuneration committee. On the basis of this evaluation, the remuneration committee should relatively place their company (Paragraphs 6.11 – 6.12). c) While making changes to the annual salary of the executives, the remuneration committee should look into the payment and employment situations in other areas of the company rather than only concentrating on the executive pay and increasing them so as to satisfy the executives (Paragraph 6.13). d) The part of remuneration that is related to performance should be designed in such a way that the executives incentives go hand in hand with the interest of the shareholders and the executives are motivated to perform their duties with high standards (Paragraph 6.16). e) The performan ce conditions for executives to avail their annual bonuses, if any, should be designed to support and widen the operations of the business. The maximum possible amount of annual bonus an executive can avail should be taken into consideration by the remuneration committee and in some cases a part of these bonus payments can also be made by shares (Paragraphs 6.19 – 6.22). f) Under the long term incentive scheme, the Greenbury Report suggested that the shares and options granted to the executives should neither vest nor be exercisable, at least for a period of 3 years after such grant. The remuneration committee should encourage its executives to keep possession of their shares, after its vesting or exercise, for a long period of time (Paragraphs 6.23 – 6.34). g) The present existing long term incentive scheme should either be replaced by the new incentive scheme proposed or, the new incentive scheme proposed when combined with the old existing scheme should formulate a well structured incentive plan. The remuneration committee should make sure that the new long term incentive plan does not pay in excess than what is actually required for the executives and this new plan is accepted by the shareholders (Paragraph 6.35). h) The criteria for any long term incentive grant should be challenging and the performance of the executives should help achieve the goals set by the company in order to stand out from rest of its competitors. Key variables like the total shareholders return are used to judge the performance of the company with respect to its competitors (Paragraphs 6.38 – 6.40). i) Executive stock option grant or any other long term incentive grant must not be presented in lump-sum but should be awarded in series of stages. Moreover, no discount should be provided to the executives on the issue of executive stock option (Paragraph 6.29). j) While increasing the annual basic salary of the executives, the remuneration committee should look in to the effect of such increase on the executives pension entitlement and on the future expenses of the company particularly in case of those executives who are nearing retirement. The annual bonuses paid or any benefits paid in kind are not entitled for any pension payment (Paragraph 6.42 – 6.45). The aim of the Greenbury Report was not to cut down the executives remuneration but was to establish a balance between the compensation paid to the executives and their respective performance. On publishing the report in 1995 by the Greenbury Committee, certain tax advantages that was permitted on newly issued share options which comes under the approved executive share option scheme was withdrawn by the UK government. A new type of option scheme was introduced in November 1995 which had an upper limit of only  £20,000 on individual option holdings. Further, executive share options whose exercise price was earlier accepted at a discounted price of 15% on the existing share price at the time of grant was prevented (Konstantinos Stathopoulos, Susanne Espenlaub Martin Walker, 2003). According to Conyon (1994) in UK, the top executive director of a company was also made member of its remuneration committee before the launch of the Greenbury Report. However, the old fashioned executive share options schemes was not benefitted from the recommendations made by the Greenbury Committee as it not only seized the tax benefits but also encouraged to substitute options with long term incentive plans which in the UK is just awarding shares and not cash. The recommendations made by the Greenbury Report were not widely accepted as many of the critics believed that the report failed to link the executive pay with the performance of the company. 3.3 The Combined Code (1998): The Combined Code of the London Stock Exchange controls the various remuneration practices adopted by the companies listed in the London Stock Exchange. It has combined the recommendations given by the Cadbury Report and the Greenbury Report in order to form a regulation for efficient remuneration practice. The annual report of the companies listed should contain in a separate section the remuneration policy adopted by the company. The Combined Code requires a statement, in the annual report, showing that the remuneration standards mentioned in the code are being followed by the company and if any set standard is not complied with, the statement should point out the reason for the non compliance. A high level of executive remuneration disclosure is also required under the combined code and clear explanations about the various compensation packages provided to each executive director and non executive director should be stated (Konstantinos Stathopoulos, Susanne Espenlaub Martin Walk er, 2003). 4 Structure of Executive Remuneration in the UK: The typical structure of executive compensation in UK comprise of base salary, annual bonus, share options and long term incentive plans along with certain additional components like restricted stock and retirement plans. In 1997, an average executive compensation package consisted of 54% of base salary, 24% of annual bonus and 22% of non cash items which include share options and long term incentive plans (Martin J. Conyon, Simon I. Peck, Laura E. Read and Graham V. Sadler, 2000). Base Salary Determination of the base salary of an executive is done by taking into consideration the base salaries paid to executives of other companies in the same industry through surveys and analysis. This system of setting up and providing base salary is known as competitive benchmarking. Certain modifications are carried out on the base salary depending on the size of the firm, thereby linking executive compensation and firm size. In UK, base salary form the major part of the total executive remuneration paid. Base salary is that component of executive remuneration which is fixed and do not vary according to the performance, experience, age, etc of the executives. A  £1 increase in the base salary is preferred by executives who are risk averse than a  £1 increase in other components of executive compensation that are variable. Annual Bonus Bonus is provided to the executives on the basis of their performance during the relevant financial year. It is provided on an annual basis and the amounts paid as bonus to each executive vary from year to year. The performance of the executives is generally measured by taking into consideration accounting numbers which can be cross checked and audited. Executives have a clear idea of their daily performance by looking at the accounting numbers and they can forecast how overall profit of the company is going to look like at the end of the year. The drawback of relying on accounting numbers for measuring performance is that it is fully under the control of the executives and if wanted executives can manipulate the accounts in order to increase their annual bonus entitlement. Share Options Share options are contracts provided to the executives that cannot be traded which gives the executives the right to buy the shares of the firm at a price that is pre-determined known as the exercisable price for a specified time period. These contracts become void and have to be surrendered if the exercisable period mentioned has elapsed or if the executive resigns from the company before the exercisable period. This component of executive compensation is looked more into detail in the later section. Long-Term Incentive Plans – Long-Term Incentive Plans are provided to the executives in order to motivate and compensate them for achieving long term performance for the company. Grant of shares is the most typical form of LTIPs provided in the UK. These shares are vested to the executives only on achieving the objectives set by the company that is related to future performance. Earnings per Share and Total Shareholders Return are the two main elements by which the performance of the company is measured in the UK. Retirement Plans – Apart from the basic pension plans provided by the company, in UK, executives are encouraged to participate in an additional retirement benefit plan. These plans are a major source of concern because it symbolises invisible compensation. The actual value of executive retirement plan cannot be calculated by the available information provided in the books of accounts and the annual report. 4.1 Disclosure Requirement of Executives Remuneration in the UK: The Greenbury Report in 1995 identified three fundamental principles, which are accountability, transparency and performance linkage, in respect to executives remuneration. In UK, the current best practice disclosure pattern failed to compile with these fundamental principles therefore the government introduced certain necessary additions to the existing disclosure pattern. These latest requirements regarding disclosure of UK executives remuneration unifies the existing law, regulation and best practices that are mentioned in the UK Companies Act of 1985, the UK Listing Rules and the UK Combined Code of Principles of Good Governance and Code of Best Practice. The new requirement requires every company in the UK to adopt and prepare the directors remuneration report along with other necessary requirements. 4.1.1 Directors Remuneration Report (DRR): Companies listed in the London Stock Exchange should prepare the directors remuneration report for every financial year (Section 234B Companies Act) and should publish this report along with the accounts and annual report of the company (Section 244 Companies Act). The preparation of the remuneration report is done by the board of directors and not by the remuneration committee being, a committee accountable and responsible to the board and consisting only the non executive directors of the company. The remuneration of both the executive and non executive directors is clearly mentioned in the remuneration report. The fully prepared remuneration report should be filed with the registrar of companies (Section 242 Companies Act) and made available and provided to all the parties interested in the company such as the shareholders, debenture holders, and other persons who are required to attend the general meetings (Section 238 Companies Act). The remuneration report should contain all the information regarding the remuneration of the directors for the financial year completed i.e. the relevant financial year which includes disclosure of the amount receivable by the directors, whether paid or not, during the financial year as well as the disclosure of any amount paid as directors remuneration for any other period during the financial year (Companies Act, Schedule 7A, paragraph 19). The remuneration report should include the payments made to a third party for any services provided to the directors (Companies Act, Schedule 7A, paragraph 18(3)) and a statement showing the future remuneration policy of the directors. In UK, only the disclosure of directors remuneration is needed in the remuneration report. The name and information of every person who is the director, during the relevant financial year, has to be mentioned in the remuneration report. The remuneration report contains information that has to be audited by an external auditor (Companies Act, Schedule 7A, Part 3) and information need not be audited (Companies Act, Schedule 7A, Part 3). a) Information in DRR subject to audit: With regards to information subject to audit, the external auditor in his own consent should mention whether the information provided are prepared according to the necessary requirement and if any information is not complied as needed, the auditor should provide a statement showing them (Sections 235 and 237 Companies Act). The auditor will also look into disclosure information that are not subjected to audit and verify them with the company accounts as well as with the disclosure information that are audited. The various information included in the DRR that are subject to audit are: Emoluments and compensation For the services provided to the company as an executive or for any other services relating to the companys management, the salary, bonus, fees or compensation as termination of qualifying services received or receivable by the executives should be disclosed in the DRR. The overall value of non monetary benefits provided to the executives should be mentioned and the total aggregate of each kind of executive compensation provided in the relevant financial year should be compared with the previous financial year (Companies Act, Schedule 7A, paragraph 6). Share Options – The different types of shares options a company have should be mentioned along with their terms and conditions and besides each share option the total option each executive hold in the beginning of the relevant financial year as well as in the end should be disclosed. Detailed information of the various options provided during the year, its date of grant, its exercise price, date of expiry, number that have become void and number exercised and unexercised by the executives should be mentioned. If the share options are subject to any performance condition then the criteria has to be clearly described. For those shares that have been exercised, the market price during the time of exercise and for those shares unexercised ,the highest, lowest and the year end market prices have to be also mentioned. Since the disclosure of share options is a lengthy process, the aggregate of options each director hold is stated and the disclosure can be made on the basis of weighted average exercise pri ces (Companies Act, Schedule 7A, paragraphs 7-9). Long-term incentive schemes – Disclosure of scheme interests at the beginning and end of the current financial year which each executive hold must be made. Details of the type of scheme interest provided to the executives, its value and when it is vested in the year should be mentioned. If there are any conditions on the basis of which scheme interests will be granted then the relevant conditions should be specified (Companies Act, Schedule 7A, paragraphs 10 and 11). Other Information Details of executives pension scheme transfer value, any benefits that are accumulated over time and amount paid or payable by the company towards the money purchase pension scheme and retirement benefit scheme should be mentioned (Companies Act, Schedule 7A, paragraph 12). Amount received or receivable by the executives as benefits over and above the retirement benefit which he is entitled after 31st March 1997 should be included in the DRR (Companies Act, Schedule 7A, paragraph 13). If any person, who was once the executive of the company, has been given a special reward or if any third party is paid for their services provided to the executives during the relevant financial year it should be stated and disclosed (Companies Act, Schedule 7A, paragraph 14 15). b) Information in DRR not subject to audit: The information in the DRR that are not subject to audit is: Remuneration Committee – If any decision regarding the remuneration of the executives is taken by a committee during the financial year then the DRR must contain the name of all the non executive directors who were the members of such a committee and also should mention the name of any other person who is not the member of the committee but has been appointed by the members to assist them with certain services and advice. The details of the services rendered by the outside party should be clearly mentioned and this is done to ensure that the executive director play no role and influence the decision making of the committee (Companies Act, Schedule 7A, paragraph 2). Statement of policy on executives remuneration – A statement of future policy on executives remuneration for the coming financial years has to be included in the directors remuneration report (Companies Act, Schedule 7A, paragraph 3). The statement of policy should therefore disclose the conditions of performance, by an executive, for the entitlement of share option and long term incentive scheme along with the reasons for setting up such performance condition and the method used to assess the performance condition. If any executive fails meet the performance condition and does not benefit from the stock option grant or long term incentive scheme, the report should clearly state the conditions that are unsatisfactory. Details of the company on the basis of which the performance is measured should be provided in the report. Changes or amendments proposed to the existing terms and conditions for executives entitlement should be highlighted. Explanation should also provide for non-performance related remuneration and company policies on executives service contracts. This statement covers all directors from the end of the current financial year till the time when the report is put for voting by the shareholders of the company Performance graph – Publication of preceding 5 years performance graph should be included in the DRR showing the total shareholder return for holding shares whose listing transformed the company into a quoted company and for holding shares on the basis of which calculations are made for a broad equity market index. A fair method is used for the calculation of the total shareholder return along with various assumptions like the interest received on shares being reinvested (Companies Act, Schedule 7A, paragraph 4). Service Contract – During the relevant financial year if any executive is provided with a service contract, the date at which the service contract has been provided, its duration and its terms and conditions should be mentioned in the remuneration report. A detail of the termination compensation the executive is entitled to receive along with the companys liability on early termination is to be included (Companies Act, Schedule 7A, paragraph 5). On the complete preparation of the remuneration report, in the annual general body meeting it is introduced and called for a vote by the shareholders of the company (Section 241A Companies Act). This concept of voting the remuneration report was a controversial topic as many commentators suggested the voting to be limited to only the remuneration policy rather than the whole remuneration report. The reason they point out is that the executives remuneration policies are futuristic in nature so the shareholders can express their opinion on the policies adopted ra ther than making aware of the actual remuneration paid to each individual director. 4.1.2 Other Requirements: a) Along with the preparation of the DRR, disclosure of the aggregate compensation of the executive, loan given to the executives and other company transactions with the executive should be done in the notes of the annual accounts as mentioned in Schedule 6 of the Companies Act. b) As per Section 251 of the Companies Act and Companies Regulations (1995), listed companies in their summary financial statements should as a statement, state its policies regarding the remuneration of executives and the companys performance graph. 5 Stock/Share Options – Are they the Best in an Executive Compensation package? The most prominent and important component of executive compensation, in order to merge the interests of the executives with that of the interests of the shareholders, is providing the executives with stock options in the firms they serve (Jensen and Meckling, 1976). According to Jeffrey A. Williamson and Brian H. Kleiner, A stock option is a security that represents the right, but not the obligation, to buy or sell a specified amount of stocks at a specified price within a specified period of time. Stock options granted to executives of many large multinational firms are much higher in value than the annual cash pay they are entitled to be paid which in-turn boosts up the overall total compensation provided to the executives. This makes stock options the single largest ingredient in the current scenario of executive compensation. In the United States itself, stock options are held by more than 10 million employees (Simon R. and Dugan J., 2001) out of which around 160,000 of them tur ned out to be millionaires (Tate E.A. and Wilson T.E., 2001). Initially stock options were provided as a bonus to all the key executives of a company, but during the recent years its use is restricted only to the top level management. Providing stock options have resulted in increased productivity of the organisations. Executives are aware that their gain is linked with the stock performance of the organisation therefore they strive harder and work more efficiently to achieve progress. The main objective behind granting stock options is to make sure that executive make a profit on the success of the companys operations and in case of failures they suffer. Hence executive stock options link pay to performance. Critics argue to provide shares of stock rather than providing stock options in order to link pay and performance. The value of a stock option is only one third the value of a share, in case of companies having an average volatile stock price and yielding an average dividend the reason being stockholders receiving the whole value along with the dividend payment and the option holders benefitting only from the additional returns that is over and above the exercise price. This implies that options have a greater leverage and at the same cost, a company can provide its executives with options that are three times as much as that of shares. Stock options are incentive plans that are future Executive Compensation and Stock Option in the UK Executive Compensation and Stock Option in the UK 1 Introduction Todays highly competitive world consists of numerous corporations and these corporations are so huge and so large that it cannot be controlled by the people who own them. The control of these corporations is separated from shareholders who are the owners and vested into the hands of professional executives who are specifically hired for its management. This separation of ownership and control gave rise to agency problem or the principal-agent problem. Principal is referred to the stockholders and the agents are the executives who work for the stockholders. Although stockholders are the owners of the company to whom the executives are accountable, their actual powers are restricted except in the case of those corporations where stockholders are also the directors of that corporation. Stockholders have no right to inspect the books of accounts nor are they aware of the exact functioning and position of the firm. As a result, executives tend to work inefficiently without even bothering to look for profitable new investment opportunities, as well as they may use the firms assets for private purposes and also work to achieve their personal goals all at the expense of the shareholders. Some managers do not take any action whatever state or condition the corporation may be as they are risk averse and fear the threat of losing their job if a decision taken by them goes wrong. Therefore in order to avoid the various problems that arise due to the agency problem, executives must be properly and promptly compensated along with proper monitoring. In the beginning of 1990s, debates on corporate governance mainly focused on directors remuneration and fat cats. Fat cats are referred to those executives who provided themselves with huge compensation packages without any performance criteria. In UK, the most famous Fat Cat episode which saddened the shareholders of many large public companies and dragged the attention of the media was the notorious British Gas incident of the mid 1990s. Various issues arising out of executive compensation and the trouble of framing the deserved level of compensation, that has to be provided to an executive, made executive remuneration a main area of concern under corporate governance. According to Jensen (1993), providing the right level of remuneration to the executives and creating positive incentives in order to achieve the interest of the shareholders has been an important study conducted in many academic literatures. An improvement in corporate governance is brought about by filtering certain aspects of executive remuneration. There exists a wide gap between the remuneration paid to the executives and the remuneration paid to the other employees on the company. This gap keeps on increasing year after year as executives demand more and more for their services and decision making process to boosts the productivity and reputation of the firm which thereby increases the market price of the companys share. In a research mentioned in the Higgs Report (2003), chairmen of FTSE 100 companies in 2003 earned an average of  £ 426,000 as remuneration. Moreover, executives are being rewarded with stock options which would enrich them with abnormal profits in the future when the options granted to them are exercised. Critics argue that, executives are not worth for the remuneration paid because of their poor and unsatisfactory performance. According to Blitz (2003), MORI a leading market research company in the UK, through a survey, found 78% of the people unsatisfied by the remuneration paid to the executives. The pu blic in UK believe that executives are being overpaid for the amount of work they actually do. 2 Methodology This paper is a critical review on the various aspects of executive compensation in the UK and how the executive compensation especially the executive stock option encourage the managers and top executives, for their personal benefit, to take short term high risks and boost up the current value of shares rather than looking into the future and acting in favour of the stakeholders of the company. The tools used for the research mainly consist of various literature reviews of past articles and current working papers with some analysis of some statistical data regarding executive compensation. On the basis of the above mentioned area of research certain questions have been framed which will be critically looked into: a) Brief description of the executive compensation and corporate governance in the UK. b) Basic structure of executive remuneration in the UK and their disclosure requirements in United Kingdom. c) Are stock options considered the best means of remuneration in an executive compensation package? d) A brief historical overview of the introduction of executive stock option in the UK. e) What are the various manipulations done with executive stock option and what are the risk incentives created by executive stock option? f) Brief comparison of the UK executive compensation with the US executive compensation. g) The role of executive compensation in the UK banking towards the current financial crises. 3 Executive Compensation and Corporate Governance in the United Kingdom: During the past decade, various issues on corporate governance established the emergence of many reports and codes of best practice in the United Kingdom. These include the Inland Revenue (1988), Cadbury Report (1992), Greenbury Report (1995), Hampel Report (1998), The Combined Code (1998), Hermes Statement on Corporate Governance and Voting Policy (1998), Internal Control: Guidance for Directors on the Combined Code (Turnbull Report)(1999), Company Law Reform (1999) and Financial Services Market Act (2001) (Konstantinos Stathopoulos, Susanne Espenlaub, Martin Walker, 2003). Among these reports the Cadbury Report, Greenbury Report and the Combined Code, which emerged from the Hampel Report, focused on issues regarding executive compensation. 3.1 Cadbury Report (1992): The first guidelines of good practice on various issues of corporate governance were provided in the year 1992 by the Cadbury Committee which was established in May 1991 and was chaired by Adrian Cadbury. The Cadbury Committee discussed issues that were broader in nature than the executive remuneration but certain suggestions the committee made on altering the executive pay was accepted as permanent. The Cadbury report was titled as the Financial Aspects of Corporate Governance and came out with the Code of Best Practice, which insisted that decisions based on executive remunerations should not be made by the executive directors nor they have to get involved in making such a decision (1992, paragraph 4.42 p. 31). The report therefore recommended the appointment of a remuneration committee which will act in the interest of the shareholders of the firm and express a good opinion on various matters regarding executive compensation to the board. Companies in the UK responded spontaneousl y to this recommendation made in the Cadbury Report and established a remuneration committee within the firm (Bostock, 1995). The remuneration committee consists of a non-executive director as the chairperson and non-executive directors as its members who are all independent and free from the influence of the management. According to Williamson (I985), there always arises a question of doubt whether the directors make remuneration contracts for their own huge benefits and sanction it, if an independent pay committee does not exist. The role of remuneration committee is to ensure that executive compensation levels are set up in a formal, transparent way along with the goals required to be achieved by the executives for any schemes that are performance related. The remuneration committee can take advice from outside sources whenever necessary. The Cadbury report also suggested the establishment of an audit committee within each company which comprises of three non-executive directors (Martin Conyon, Paul Gregg and Stephen Machin, 1995). According to a questionnaire survey conducted by Conyon and Mallin (1997), by 1995, 98% of the companies followed the suggestions made by the Cadbury report and has reported the involvement of the remuneration committee in their annual reports. 3.2 The Greenbury Report (1995): Cadbury report failed to provide detailed guidance on how compensation packages have to be structured. However, it pointed out executive compensation to be the main area of study for the next committee known as the Greenbury Committee. The Greenbury Committee chaired by Sir Richard Greenbury, was formed by the United Kingdom Confederation of Business and Industry, and in 1995 it submitted the Greenbury report which dealt with matters regarding the determination and accounting of top executive pay. The main issues discussed in the Greenbury Report includes the role of the remuneration committee in an organisation, the disclosure requirement required by the shareholders of the organisation, the remuneration policies for compensating the executives and the service contracts provided to the executives. The remuneration policies recommended in the Greenbury Report are: a) Compensation packages must be provided by the remuneration committee to quality executives in order to influence, sec ure and encourage them and any payments extra to this intention must be avoided (Greenbury Report Paragraphs 6.5 – 6.7). b) The payments made and the subsequent resulting performance by other companies in the same industry must be evaluated by the remuneration committee. On the basis of this evaluation, the remuneration committee should relatively place their company (Paragraphs 6.11 – 6.12). c) While making changes to the annual salary of the executives, the remuneration committee should look into the payment and employment situations in other areas of the company rather than only concentrating on the executive pay and increasing them so as to satisfy the executives (Paragraph 6.13). d) The part of remuneration that is related to performance should be designed in such a way that the executives incentives go hand in hand with the interest of the shareholders and the executives are motivated to perform their duties with high standards (Paragraph 6.16). e) The performan ce conditions for executives to avail their annual bonuses, if any, should be designed to support and widen the operations of the business. The maximum possible amount of annual bonus an executive can avail should be taken into consideration by the remuneration committee and in some cases a part of these bonus payments can also be made by shares (Paragraphs 6.19 – 6.22). f) Under the long term incentive scheme, the Greenbury Report suggested that the shares and options granted to the executives should neither vest nor be exercisable, at least for a period of 3 years after such grant. The remuneration committee should encourage its executives to keep possession of their shares, after its vesting or exercise, for a long period of time (Paragraphs 6.23 – 6.34). g) The present existing long term incentive scheme should either be replaced by the new incentive scheme proposed or, the new incentive scheme proposed when combined with the old existing scheme should formulate a well structured incentive plan. The remuneration committee should make sure that the new long term incentive plan does not pay in excess than what is actually required for the executives and this new plan is accepted by the shareholders (Paragraph 6.35). h) The criteria for any long term incentive grant should be challenging and the performance of the executives should help achieve the goals set by the company in order to stand out from rest of its competitors. Key variables like the total shareholders return are used to judge the performance of the company with respect to its competitors (Paragraphs 6.38 – 6.40). i) Executive stock option grant or any other long term incentive grant must not be presented in lump-sum but should be awarded in series of stages. Moreover, no discount should be provided to the executives on the issue of executive stock option (Paragraph 6.29). j) While increasing the annual basic salary of the executives, the remuneration committee should look in to the effect of such increase on the executives pension entitlement and on the future expenses of the company particularly in case of those executives who are nearing retirement. The annual bonuses paid or any benefits paid in kind are not entitled for any pension payment (Paragraph 6.42 – 6.45). The aim of the Greenbury Report was not to cut down the executives remuneration but was to establish a balance between the compensation paid to the executives and their respective performance. On publishing the report in 1995 by the Greenbury Committee, certain tax advantages that was permitted on newly issued share options which comes under the approved executive share option scheme was withdrawn by the UK government. A new type of option scheme was introduced in November 1995 which had an upper limit of only  £20,000 on individual option holdings. Further, executive share options whose exercise price was earlier accepted at a discounted price of 15% on the existing share price at the time of grant was prevented (Konstantinos Stathopoulos, Susanne Espenlaub Martin Walker, 2003). According to Conyon (1994) in UK, the top executive director of a company was also made member of its remuneration committee before the launch of the Greenbury Report. However, the old fashioned executive share options schemes was not benefitted from the recommendations made by the Greenbury Committee as it not only seized the tax benefits but also encouraged to substitute options with long term incentive plans which in the UK is just awarding shares and not cash. The recommendations made by the Greenbury Report were not widely accepted as many of the critics believed that the report failed to link the executive pay with the performance of the company. 3.3 The Combined Code (1998): The Combined Code of the London Stock Exchange controls the various remuneration practices adopted by the companies listed in the London Stock Exchange. It has combined the recommendations given by the Cadbury Report and the Greenbury Report in order to form a regulation for efficient remuneration practice. The annual report of the companies listed should contain in a separate section the remuneration policy adopted by the company. The Combined Code requires a statement, in the annual report, showing that the remuneration standards mentioned in the code are being followed by the company and if any set standard is not complied with, the statement should point out the reason for the non compliance. A high level of executive remuneration disclosure is also required under the combined code and clear explanations about the various compensation packages provided to each executive director and non executive director should be stated (Konstantinos Stathopoulos, Susanne Espenlaub Martin Walk er, 2003). 4 Structure of Executive Remuneration in the UK: The typical structure of executive compensation in UK comprise of base salary, annual bonus, share options and long term incentive plans along with certain additional components like restricted stock and retirement plans. In 1997, an average executive compensation package consisted of 54% of base salary, 24% of annual bonus and 22% of non cash items which include share options and long term incentive plans (Martin J. Conyon, Simon I. Peck, Laura E. Read and Graham V. Sadler, 2000). Base Salary Determination of the base salary of an executive is done by taking into consideration the base salaries paid to executives of other companies in the same industry through surveys and analysis. This system of setting up and providing base salary is known as competitive benchmarking. Certain modifications are carried out on the base salary depending on the size of the firm, thereby linking executive compensation and firm size. In UK, base salary form the major part of the total executive remuneration paid. Base salary is that component of executive remuneration which is fixed and do not vary according to the performance, experience, age, etc of the executives. A  £1 increase in the base salary is preferred by executives who are risk averse than a  £1 increase in other components of executive compensation that are variable. Annual Bonus Bonus is provided to the executives on the basis of their performance during the relevant financial year. It is provided on an annual basis and the amounts paid as bonus to each executive vary from year to year. The performance of the executives is generally measured by taking into consideration accounting numbers which can be cross checked and audited. Executives have a clear idea of their daily performance by looking at the accounting numbers and they can forecast how overall profit of the company is going to look like at the end of the year. The drawback of relying on accounting numbers for measuring performance is that it is fully under the control of the executives and if wanted executives can manipulate the accounts in order to increase their annual bonus entitlement. Share Options Share options are contracts provided to the executives that cannot be traded which gives the executives the right to buy the shares of the firm at a price that is pre-determined known as the exercisable price for a specified time period. These contracts become void and have to be surrendered if the exercisable period mentioned has elapsed or if the executive resigns from the company before the exercisable period. This component of executive compensation is looked more into detail in the later section. Long-Term Incentive Plans – Long-Term Incentive Plans are provided to the executives in order to motivate and compensate them for achieving long term performance for the company. Grant of shares is the most typical form of LTIPs provided in the UK. These shares are vested to the executives only on achieving the objectives set by the company that is related to future performance. Earnings per Share and Total Shareholders Return are the two main elements by which the performance of the company is measured in the UK. Retirement Plans – Apart from the basic pension plans provided by the company, in UK, executives are encouraged to participate in an additional retirement benefit plan. These plans are a major source of concern because it symbolises invisible compensation. The actual value of executive retirement plan cannot be calculated by the available information provided in the books of accounts and the annual report. 4.1 Disclosure Requirement of Executives Remuneration in the UK: The Greenbury Report in 1995 identified three fundamental principles, which are accountability, transparency and performance linkage, in respect to executives remuneration. In UK, the current best practice disclosure pattern failed to compile with these fundamental principles therefore the government introduced certain necessary additions to the existing disclosure pattern. These latest requirements regarding disclosure of UK executives remuneration unifies the existing law, regulation and best practices that are mentioned in the UK Companies Act of 1985, the UK Listing Rules and the UK Combined Code of Principles of Good Governance and Code of Best Practice. The new requirement requires every company in the UK to adopt and prepare the directors remuneration report along with other necessary requirements. 4.1.1 Directors Remuneration Report (DRR): Companies listed in the London Stock Exchange should prepare the directors remuneration report for every financial year (Section 234B Companies Act) and should publish this report along with the accounts and annual report of the company (Section 244 Companies Act). The preparation of the remuneration report is done by the board of directors and not by the remuneration committee being, a committee accountable and responsible to the board and consisting only the non executive directors of the company. The remuneration of both the executive and non executive directors is clearly mentioned in the remuneration report. The fully prepared remuneration report should be filed with the registrar of companies (Section 242 Companies Act) and made available and provided to all the parties interested in the company such as the shareholders, debenture holders, and other persons who are required to attend the general meetings (Section 238 Companies Act). The remuneration report should contain all the information regarding the remuneration of the directors for the financial year completed i.e. the relevant financial year which includes disclosure of the amount receivable by the directors, whether paid or not, during the financial year as well as the disclosure of any amount paid as directors remuneration for any other period during the financial year (Companies Act, Schedule 7A, paragraph 19). The remuneration report should include the payments made to a third party for any services provided to the directors (Companies Act, Schedule 7A, paragraph 18(3)) and a statement showing the future remuneration policy of the directors. In UK, only the disclosure of directors remuneration is needed in the remuneration report. The name and information of every person who is the director, during the relevant financial year, has to be mentioned in the remuneration report. The remuneration report contains information that has to be audited by an external auditor (Companies Act, Schedule 7A, Part 3) and information need not be audited (Companies Act, Schedule 7A, Part 3). a) Information in DRR subject to audit: With regards to information subject to audit, the external auditor in his own consent should mention whether the information provided are prepared according to the necessary requirement and if any information is not complied as needed, the auditor should provide a statement showing them (Sections 235 and 237 Companies Act). The auditor will also look into disclosure information that are not subjected to audit and verify them with the company accounts as well as with the disclosure information that are audited. The various information included in the DRR that are subject to audit are: Emoluments and compensation For the services provided to the company as an executive or for any other services relating to the companys management, the salary, bonus, fees or compensation as termination of qualifying services received or receivable by the executives should be disclosed in the DRR. The overall value of non monetary benefits provided to the executives should be mentioned and the total aggregate of each kind of executive compensation provided in the relevant financial year should be compared with the previous financial year (Companies Act, Schedule 7A, paragraph 6). Share Options – The different types of shares options a company have should be mentioned along with their terms and conditions and besides each share option the total option each executive hold in the beginning of the relevant financial year as well as in the end should be disclosed. Detailed information of the various options provided during the year, its date of grant, its exercise price, date of expiry, number that have become void and number exercised and unexercised by the executives should be mentioned. If the share options are subject to any performance condition then the criteria has to be clearly described. For those shares that have been exercised, the market price during the time of exercise and for those shares unexercised ,the highest, lowest and the year end market prices have to be also mentioned. Since the disclosure of share options is a lengthy process, the aggregate of options each director hold is stated and the disclosure can be made on the basis of weighted average exercise pri ces (Companies Act, Schedule 7A, paragraphs 7-9). Long-term incentive schemes – Disclosure of scheme interests at the beginning and end of the current financial year which each executive hold must be made. Details of the type of scheme interest provided to the executives, its value and when it is vested in the year should be mentioned. If there are any conditions on the basis of which scheme interests will be granted then the relevant conditions should be specified (Companies Act, Schedule 7A, paragraphs 10 and 11). Other Information Details of executives pension scheme transfer value, any benefits that are accumulated over time and amount paid or payable by the company towards the money purchase pension scheme and retirement benefit scheme should be mentioned (Companies Act, Schedule 7A, paragraph 12). Amount received or receivable by the executives as benefits over and above the retirement benefit which he is entitled after 31st March 1997 should be included in the DRR (Companies Act, Schedule 7A, paragraph 13). If any person, who was once the executive of the company, has been given a special reward or if any third party is paid for their services provided to the executives during the relevant financial year it should be stated and disclosed (Companies Act, Schedule 7A, paragraph 14 15). b) Information in DRR not subject to audit: The information in the DRR that are not subject to audit is: Remuneration Committee – If any decision regarding the remuneration of the executives is taken by a committee during the financial year then the DRR must contain the name of all the non executive directors who were the members of such a committee and also should mention the name of any other person who is not the member of the committee but has been appointed by the members to assist them with certain services and advice. The details of the services rendered by the outside party should be clearly mentioned and this is done to ensure that the executive director play no role and influence the decision making of the committee (Companies Act, Schedule 7A, paragraph 2). Statement of policy on executives remuneration – A statement of future policy on executives remuneration for the coming financial years has to be included in the directors remuneration report (Companies Act, Schedule 7A, paragraph 3). The statement of policy should therefore disclose the conditions of performance, by an executive, for the entitlement of share option and long term incentive scheme along with the reasons for setting up such performance condition and the method used to assess the performance condition. If any executive fails meet the performance condition and does not benefit from the stock option grant or long term incentive scheme, the report should clearly state the conditions that are unsatisfactory. Details of the company on the basis of which the performance is measured should be provided in the report. Changes or amendments proposed to the existing terms and conditions for executives entitlement should be highlighted. Explanation should also provide for non-performance related remuneration and company policies on executives service contracts. This statement covers all directors from the end of the current financial year till the time when the report is put for voting by the shareholders of the company Performance graph – Publication of preceding 5 years performance graph should be included in the DRR showing the total shareholder return for holding shares whose listing transformed the company into a quoted company and for holding shares on the basis of which calculations are made for a broad equity market index. A fair method is used for the calculation of the total shareholder return along with various assumptions like the interest received on shares being reinvested (Companies Act, Schedule 7A, paragraph 4). Service Contract – During the relevant financial year if any executive is provided with a service contract, the date at which the service contract has been provided, its duration and its terms and conditions should be mentioned in the remuneration report. A detail of the termination compensation the executive is entitled to receive along with the companys liability on early termination is to be included (Companies Act, Schedule 7A, paragraph 5). On the complete preparation of the remuneration report, in the annual general body meeting it is introduced and called for a vote by the shareholders of the company (Section 241A Companies Act). This concept of voting the remuneration report was a controversial topic as many commentators suggested the voting to be limited to only the remuneration policy rather than the whole remuneration report. The reason they point out is that the executives remuneration policies are futuristic in nature so the shareholders can express their opinion on the policies adopted ra ther than making aware of the actual remuneration paid to each individual director. 4.1.2 Other Requirements: a) Along with the preparation of the DRR, disclosure of the aggregate compensation of the executive, loan given to the executives and other company transactions with the executive should be done in the notes of the annual accounts as mentioned in Schedule 6 of the Companies Act. b) As per Section 251 of the Companies Act and Companies Regulations (1995), listed companies in their summary financial statements should as a statement, state its policies regarding the remuneration of executives and the companys performance graph. 5 Stock/Share Options – Are they the Best in an Executive Compensation package? The most prominent and important component of executive compensation, in order to merge the interests of the executives with that of the interests of the shareholders, is providing the executives with stock options in the firms they serve (Jensen and Meckling, 1976). According to Jeffrey A. Williamson and Brian H. Kleiner, A stock option is a security that represents the right, but not the obligation, to buy or sell a specified amount of stocks at a specified price within a specified period of time. Stock options granted to executives of many large multinational firms are much higher in value than the annual cash pay they are entitled to be paid which in-turn boosts up the overall total compensation provided to the executives. This makes stock options the single largest ingredient in the current scenario of executive compensation. In the United States itself, stock options are held by more than 10 million employees (Simon R. and Dugan J., 2001) out of which around 160,000 of them tur ned out to be millionaires (Tate E.A. and Wilson T.E., 2001). Initially stock options were provided as a bonus to all the key executives of a company, but during the recent years its use is restricted only to the top level management. Providing stock options have resulted in increased productivity of the organisations. Executives are aware that their gain is linked with the stock performance of the organisation therefore they strive harder and work more efficiently to achieve progress. The main objective behind granting stock options is to make sure that executive make a profit on the success of the companys operations and in case of failures they suffer. Hence executive stock options link pay to performance. Critics argue to provide shares of stock rather than providing stock options in order to link pay and performance. The value of a stock option is only one third the value of a share, in case of companies having an average volatile stock price and yielding an average dividend the reason being stockholders receiving the whole value along with the dividend payment and the option holders benefitting only from the additional returns that is over and above the exercise price. This implies that options have a greater leverage and at the same cost, a company can provide its executives with options that are three times as much as that of shares. Stock options are incentive plans that are future

Explication of Ulysses Essay -- Alfred Tennyson

Explication Of Ulysses   Ã‚  Ã‚  Ã‚  Ã‚   In this poem, Tennyson reworks the figure of Ulysses by drawing on the ancient hero of Homer's Odyssey. Homer's Ulysses learns from a prophecy that he will take a final sea voyage after killing the suitors of his wife Penelope. Ulysses finds himself restless in Ithaca and driven by "the longing I had to gain experience of the world†. Ulysses says that there is little point in his staying home "by this still hearth" with his old wife, handing out rewards and punishments for all of his subjects who live in his kingdom. Still speaking to himself he proclaims that he "cannot rest from travel" but feels required to live to the fullest and swallow every last drop of life. He has enjoyed all his experiences as a sailor who travels the seas, and he considers himself a model for everyone who wanders and roams the earth. His travels have exposed him to many different types of people and ways of living. They have also exposed him to the "delight of battle" while fighting the Trojan War with his men. Ulysses declares that his travels and encounters have shaped who he is: "I am a part of all that I have met," he says. And it is only when he is traveling that the "margin" of the world that he has not yet traveled shrink and fade, and stop to push him. Ulysses declares that it is boring to stay in one place, and that to remain at a standstill is to waste rather than to flourish; to stay in one place is to pretend that all there is to life is the simple a...

The Akaka Bill :: essays research papers

The Akaka Bill   Ã‚  Ã‚  Ã‚  Ã‚  To begin, it is important to recognize, a particular point in time in which Hawaii became a U.S. territory by a one sided act of Congress. The U.S. asked for no consent, treaty, or even any offer of money to the Hawaiians. Starting from this historical point in American and Hawaiian history, many Hawaiian and Native Hawaiian activists push for what they believe is rightfully theirs as the indigenous people of the islands of Hawaii. Independence. When it comes down to independence from the U.S., the Courts and basically the whole government believe that full independence would not work out in any way. This leaves the Hawaiians with two choices to decide from. The native Hawaiians could either keep their stand on full independence which has basically no chance of happening or they could go to the federal government to get the recognition of the relationship that they have available to protect them.   Ã‚  Ã‚  Ã‚  Ã‚  Following the U.S. Supreme Court decision in Rice V. Cayetano, the Akaka Bill has arose and passed in Congress due to a sense of compulsion among Hawaiians. The Akaka Bill was enacted into law, in which a majority of Hawaiians eligible to vote selected an entity called, â€Å"lahui† to represent them in negotiations with the federal government for a type of sovereignty that is yet to be determined. According to U.S. court decisions, congress has the absolute authority to expand or reduce the powers of Lahui, just as it has over the American Indians. Therefore, the Akaka Bill does not automatically guarantee sovereignty to the Hawaiian people. Congress must enact a law that authorizes the terms agreed to, once an agreement is reached between Lahui and the government.   Ã‚  Ã‚  Ã‚  Ã‚  The Akaka Bill will allow Hawaiian people to exercise self-determination under U.S. law. It will also allow the Hawaiians to have more direct control over their ancestral lands and control of trust assets. Last but not least, the rights of native Hawaiians will have more protection from constitutional challenges.   Ã‚  Ã‚  Ã‚  Ã‚  Since the issues will have a direct impact on the state’s civil and penal laws, jurisdiction over land and resources and other crucial issues, the federal government has invited the State of Hawaii to be a party to negotiations. This paper should help you to better understand the issues that are arising and might arise later due to the actions between Congress and the new Hawaiian entity, Lahui.