Partial profile · Book Profile — full narrative profile planned
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A concise accounting-and-economics guide to how, why, and how much top corporate executives are paid—covering pay components, accounting treatment, disclosure, history, economic theory, and international comparisons.
A profile of this book is on the way.
What it’s about
Executive Compensation: Accounting and Economic Issues demystifies one of the most contentious topics in corporate governance—how CEOs and their teams are paid. Written by a veteran accounting professor, it explains the composition and objectives of pay contracts, walks through the actual calculations, journal entries, and SEC disclosures required for salary, bonuses, stock options, restricted stock, SARs, and pensions, and situates all of it within an 80-year historical arc shaped by regulation and unintended consequences. Grounded in agency theory and empirical research (efficient contracting vs. managerial power), the book shows why pay exploded in the 1990s via stock options, how it moderated after the tech crash and subprime meltdown, and how U.S. pay compares to other countries. Above all, it argues that performance-based compensation—while designed to align executives with shareholders—remains the leading incentive structure driving short-term financial focus and potential accounting manipulation. It is a valuable supplement for accounting, finance, and governance courses and for professionals, board members, and policymakers.
The through-line
- Who it’s for
- An accounting/finance student, professional, board member, or policymaker who wants to genuinely understand how executives are paid, accounted for, and regulated.
- The problem
- Executive compensation is complex, politically charged, and buried in technical accounting rules, disclosures, and shifting regulation. They feel confused or outraged by headline pay numbers and unsure whether pay is justified or manipulated.
- The plan
- Learn what executive compensation is—its components and contractual objectives.
- See how specific pay agreements affect corporate behavior and performance.
- Master the accounting: calculations, journal entries, and SEC disclosures for pay components.
- Study the historical and regulatory record since the 1930s to see what has worked.
- Apply economic theory and empirical evidence (agency, efficient contracting, managerial power).
- The payoff
- The reader can read and interpret proxy and 10-K compensation disclosures, understand the journal entries behind them, and evaluate pay against firm size, risk, and performance with informed, evidence-based judgment.
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Additional reading
- Executive Salaries and Bonus Plans · John Baker
Cited as the first major empirical study of executive pay, using newly available data from the 1920s and 1930s. It provides the crucial historical baseline for the book's long-term analysis of compensation trends.
- The Modern Corporation and Private Property · Adolf Berle and Gardiner Means
This classic work is referenced as a precursor to modern agency theory, establishing the fundamental problem of the separation of ownership (shareholders) and control (managers) in large corporations.
- Capital in the Twenty-First Century · Thomas Piketty
The book's findings are cited to place the rise of 'supermanager' compensation in the U.S. within the broader context of a return to high levels of income and wealth inequality since the 1970s.