Case: In a recent communication to shareholders Hartlebury PLC announced the following:
That it was
pursuing a key objective aimed at improving the organisations' environmental impact.
And that the Chief Executive of Hartlebury PLC was to receive a salary of £150,000 plus a bonus of 4% of Profit in the forthcoming year.
As a shareholder of Hartlebury PLC you are concerned about the impact of these announcements on the position of shareholders of the company.
Provide a critical evaluation of whether both or either announcement will result in the company taking decisions which are shareholder wealth enhancing and why it is important for practical and theoretical reasons that the wealth of the shareholder is maximised. Discuss how the company's Board of Directors might reconsider the Chief Executives salary to encourage a focus on shareholder wealth.
When it comes to paying remuneration to the chief executives in a company, it... View the full answer