Consider the controversy that erupted in 2013 about the pay package of Oracle CE
ID: 2741086 • Letter: C
Question
Consider the controversy that erupted in 2013 about the pay package of Oracle CEO Larry Ellison. http://money.cnn.com/2013/11/01/technology/enterprise/larry-ellison-pay/. The article emphasizes people’s concerns that CEOs simply make too much money. Read the PPT on “corporate governance” uploaded under the ‘course materials’ tab. The PPT identifies four mechanisms of corporate governance (ownership concentration, board of directors, executive compensation and the market for corporate control). Which two mechanisms are most apparent in this article? Elaborate.
Explanation / Answer
Ans is ownership concentration and executive compensation these two mechanism are most appraent in the article, since Larry Ellison's remuneration package stands so high that share holders rejected this pay package in Annual general meeting twice within two years, that proves that the mechansim of executive compensation is present there, also Larry Ellison is one of the founder of the firm and holds huge amount stock that can be analysed when artcile says he owns a quater of the company. hence ownership concentration is also proved here to be present in the article.