Front Cover -- The Theory and Practice of Directors' Remuneration: New Challenges and Opportunities -- Copyright page -- Contents -- List of Contributors -- Introduction from Editors -- Practitioners' Outlook -- Academic Outlook -- Director Remuneration is a Matter of Growing Importance in the EU -- Legislation on Directors' Remuneration -- Corporate Governance Codes -- Remuneration Should Be Guided by Market Demands and Linked to the Company's Results -- EU Commission Recommendation -- Some of the Experience of Member States -- Three Recommendations on Disclosure of Remuneration Policy -- Remuneration Should Promote the Long-Term Sustainability -- Remuneration Policy -- Remuneration Policies in the Financial Services Sector -- Section I: Theory of Corporate Governance and Directors' Remuneration -- Chapter 1 Corporate Governance and Remuneration -- Introduction -- The Theory of the Firm - The Theory of Transaction Costs? -- Beyond the Firm and Market Dichotomy -- Incomplete Remuneration Contracts -- Agency Theory -- Adverse Selection -- Moral Hazard -- Different Agency Conflicts -- Management and Collective Production -- Outlook and Conclusion -- References -- Chapter 2 Directors' Remuneration and Motivation -- Introduction -- Agency Theory and Managerial Compensation -- Base Salary -- Bonus -- Stock Options -- Employee Motivation -- Current Intrinsic Motivator: Takeover Threats -- Well-Balanced Packages -- Conclusion -- References -- Chapter 3 Executive Compensation in the 21st Century: Future Directions -- The 21st Century -- Compensation and Motivation -- Compensation Plans: Pay-Performance Link -- Redefining Performance Evaluation in the Age of Sustainability -- Conclusion -- References -- Section II: Cross-Industrial Remuneration Practices Analysis -- Chapter 4 Financial Companies -- Introduction.

The Crisis and Its Effects on Remuneration Governance in Financial Institutions -- Elements of the Corporate Governance of Financial Institutions -- Pre- and Post-Crisis Remuneration Governance -- European Initiatives for Enhanced Governance and Remuneration -- Corporate Governance -- Remuneration -- Structuring Variable Bonuses over Time -- Discounting -- Alternative Discounting Functions -- Exponential Discounting -- Hyperbolic Discounting -- Quasi-Hyperbolic Discounting -- Evaluation -- Conclusion and Prospects -- References -- Chapter 5 Industrial Companies -- Introduction -- Background -- Literature on CEO Compensation -- Research Design -- Results -- Directors Remuneration Policy -- Directors Remuneration Design -- Directors Remuneration Factors -- Board's Role in Directors Remuneration -- Accounting Regulation -- Conclusion -- References -- Section III: Cross-Country Remuneration Practices Analysis -- Chapter 6 Directors' Remuneration in the United States -- Introduction -- Remuneration Regulation and Reporting -- Remuneration Design -- Empirical Evidence on Director Remuneration -- The Determinants of Director Remuneration -- Characteristics of Firms Adopting Outside Director Stock-Option Plans -- Director Remuneration and Compensation Committees -- Director Remuneration and Compensation Consultants -- Director Remuneration and Board Independence from CEO -- Director Remuneration and Board Overlaps -- Summary of Determinants of Director Remuneration -- The Impact of Director Remuneration on the Firm and Its Stakeholders -- Market Reaction to Adding Equity to Director Remuneration Plans -- Director Remuneration and Financial Reporting -- Director Remuneration and Dividend Paying -- Director Remuneration and Shareholder Lawsuits -- Director Remuneration and Corporate Social Performance.

Summary of the Impact of Director Remuneration on Stakeholders -- Remuneration Challenges -- References -- Chapter 7 Directors' Remuneration in the United Kingdom -- Remuneration Regulation -- The Greenbury Report 1995 -- The Combined Code on Corporate Governance 1998 and Its Subsequent Revisions -- The UK Corporate Governance Code 2010 -- The UK Corporate Governance Code 2012 -- Remuneration Design (Schemes) -- Remuneration Reporting -- Directors' Remuneration Report Regulations 2002 -- The 2012 Directors' Remuneration Reporting Reform -- Remuneration Challenges -- Problems in UK Executive Remuneration -- Challenges for Remuneration Policy -- Acknowledgements -- References -- Chapter 8 Directors' Remuneration in Germany -- Remuneration Regulation -- The German Two-Tier System -- Remuneration Regulation of the Management Board and Supervisory Board -- Remuneration Design (Schemes) -- Remuneration of the Management Board -- Remuneration of the Supervisory Board -- Remuneration Reporting -- Remuneration Challenges -- References -- Chapter 9 Directors' Remuneration in Italy -- Introduction -- Remuneration Regulation -- Listed Companies -- Bank and Banking Holdings -- Government-Owned Unlisted Companies -- Unlisted Companies -- Remuneration Design Schemes -- Remuneration Reporting -- Conclusions -- References -- Chapter 10 Directors' Remuneration in Spain -- Remuneration Regulation -- Regulation for Listed Companies -- Ley de Sociedades de Capital or Companies Act (Royal Decree, 2010) -- Codes of Good Governance -- Sustainable Economy Act (Law 2/2011) -- Securities Market Act (Article 61 Encore) -- Other Regulations of Listed Companies (Semiannual Financial Information and Significant Event) -- Regulation for Financial Institutions -- European and International Recommendations -- Sustainable Economy Act (Law 2/2011) and Royal Decree 771/2011.

Other Regulation for Financial Institutions -- Remuneration Design (Schemes) -- The Remuneration Policy for Directors in Spain. A Question Linked to the Board Structure -- Remuneration Systems' Elements in Spanish Companies -- Fixed Remuneration -- Benefits and Perquisites -- Variable Annual Remuneration (Bonus) -- Multi-Annual Variable Remuneration (Compensation Systems Tied to Share Price or in Shares) -- Pension Plans -- Rights of Compensation for Cases of Termination -- Practice Regarding Remuneration Systems in Spain (2004-2011) -- Remuneration Reporting -- Remuneration Challenges -- References -- Chapter 11 Directors' Remuneration in Ethiopia -- Introduction -- Profile of Ethiopian Companies -- The Emerging Separation of Ownership and Control in the Ethiopian Share Companies -- Directors' Remuneration in Ethiopian Share Companies -- Remuneration Regulation -- Remuneration Design (Scheme) -- Remuneration Reporting -- Remuneration Challenges -- Directors' Remuneration: Right or Privilege? -- Remuneration of Executive and Non-Executive Directors: No Distinction? -- Should Body Corporate Directors Be Remunerated? -- Amount of Bank Directors' Remuneration Becomes Controversial -- Lack of Legal Requirement for Remuneration Committee -- Participation of Employees Other than Directors on Annual Share in Profits -- Conclusion -- References -- Chapter 12 Reviewing Institution's Remuneration Requirements: From European Legislation to German Implementation -- Introduction -- Prerequisites of an Incentive-Compatible Remuneration System -- Regulative Remuneration Standards of the EU -- The Implementation of Remuneration Regulations in Germany -- Incentive-Compatibility of the European and German Regulation of Remuneration Systems -- Conclusion and Perspectives -- References -- Chapter 13 The European Approach to Regulation of Director's Remuneration.

Introduction -- Literature Review -- European Approach to the Regulation of Directors' Remuneration -- Recommendation 2004/913/EC -- Remuneration Policy -- Remuneration of Individual Directors -- Share-Based Remuneration -- Recommendation 2005/162/EC -- Additional EU Interventions -- Evidence on the Actual Compliance of the Italian Remuneration Reports to the CG Code -- References -- Index.