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Unformatted text preview: I wouldn’t consider the compensation made to Kim to be reasonable. From what is presented in the case, I seen like Kim is taking advantage of the fact that he is the sole shareholder and CEO of the business. His two immediate staff are being paid far lesser than what is taking home including bonus. To analysis the case base upon the Elliotts, Inc V Comm five factors to show how Kim’s compensation can responsible, Employee’s role in the company – this is where pay for performance comes in. Does Kim function and responsibility justifies his compensation? The case did not state. But what I will suggest here is that in order for Kim compensation to reasonable, he must accept more responsibilities. External comparisons – in comparing his salary to other CEOs in the same industry of $500,000, Kim makes more. My understanding is that he been innovative to growing his company at 7%. I securing this 7% annually, which is huge, Kim has to undertake multiple role.company at 7%....
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This note was uploaded on 09/28/2009 for the course ACCT 170 taught by Professor Larryschiffres during the Summer '09 term at Yale.
- Summer '09
- Financial Accounting