Briefly set out a) the main theoretical perspectives underlying the Essay

Briefly set out a) the main theoretical perspectives underlying the remuneration of executive directors in major national or mul - Essay Example However, this silence is less relevant to their leadership qualities, and more a result of their resultant extra ordinarily high salaries. In addition, there has been a very significant difference in the remunerations of CEOs belonging to US companies, as compared to those belonging to companies in the UK. With respect to this observation, this paper studies the remuneration of executive directors, and delves into the issues and theories concerning their outrageous amounts, and the debates that arise from them. The debate on the remuneration that executives receive has been carried out for several years. A recent factor, which has heated this debate even further, is the current recession and its effects (The Economist, 2010). This stems from the fact that over 13 percent of the residents of the US are unemployed, while millions others struggle to hold on to their jobs as their salaries and wages are reduced from what they used to be (Robbins, Judge & Judge, pp. 278, 2008). Apart from this, Lehman Brothers experienced a downfall, and needed two bailout packages from the government to recover and prevent further such happenings. This occurrence has made the common person wary of the way the scarce resources are employed, and that they should be treated as scarce instead of being wasted. However, people who only see half the picture make majority of the complaints and criticisms that the system of high remunerations receives. They see how these directors receive huge salaries for what they do, but they do not consider or even know about the stressful and demanding jobs that these directors do which help them secure such large payments (The Economist, 2010). This is a critical element that is missing from their perspectives, which makes theirs an unfair, unbalanced perspective. These critics do not bother considering the perspective of the CEOs themselves, or the significance and value of their services (The Economist, 2010). This paper aims to prove that, for this reason, their perception is flawed, and that the CEOs do earn the money they receive, using research, and statistics. Theoretical Perspectives It is an observation (Robbins et al., pp. 23-39, 2008) that a huge number of experts have carried out research on the issue of remuneration of executive directors in the United Kingdom, as well as in the United Kingdom, especially during the last decade. Analysis has identified that extraordinary increment in the salaries of executive directors been one of the major reasons of such a huge number of researches carried out on the subject. In order to understand theoretical perspectives of executive directors’ remuneration, the paper will include agency and expectancy theories that will provide a comprehensive understanding. In particular, every company in the United Kingdom follows a standard remuneration package for its executive director that usually includes a basic salary, a yearly bonus along with long-term benefits. In this packag e, salary is the permanent component whereas the other components vary in different organisations. It is an observation that two factors play a critical role in determining variable components in remuneration of executive. Firstly, the calculation that relates variable components as functions of basic salary (Robbins et al., pp. 23-39, 2008). The second factor refers to the achievement of directors in terms of their target, thus, an average performance will lead towards to a lower bonus. Besides understanding