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(Re)-structuring the Ceo’s compensation—the case of Israel

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  • Mroczek-Dąbrowska Katarzyna

    (Department of International Competitiveness, Poznań University of Economics and Business, al. Niepodległości 10, 61-875Poznań, Poland)

  • Shemesh Yaron

    (Department of International Competitiveness, Poznań University of Economics and Business, al. Niepodległości 10, 61-875Poznań, Poland)

Abstract

The executive compensation issue continues to cause protest due to the increasing number of cases of an unjustifiably high level of pay. The main conflict arises from the misalignment of interests between the short-term expectations of the manager and long-term needs of the shareholders. Since there are no universal rules on how to price the executive performance companies reach for different means of establishing the CEO’s compensation and ascertaining manager’s commitment towards maintaining a company’s value. The issue becomes more complex once the compensation rules are not a direct effect of the market power game but are additionally restricted by government. The aim of the paper is to discuss corporate government policies introduced in Israel and their impact on executive compensation level and structure. Israel is amongst those countries that partially regulate CEO compensation and thus the Israeli experience can add to the understanding of the effectiveness of modern corporate governance.

Suggested Citation

  • Mroczek-Dąbrowska Katarzyna & Shemesh Yaron, 2020. "(Re)-structuring the Ceo’s compensation—the case of Israel," Economics and Business Review, Sciendo, vol. 6(3), pages 105-117, August.
    • Handle: RePEc:vrs:ecobur:v:6:y:2020:i:3:p:105-117:n:6
    DOI: 10.18559/ebr.2020.3.6
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    References listed on IDEAS

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    More about this item

    Keywords

    CEO compensation; inequalities; compensation gap; agency theory; principal; agent conflict; corporate governance;
    All these keywords.

    JEL classification:

    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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