Gibbs Cycle for Management of Clinical Problems - myassignmenthelp

Question: Discuss about theGibbs Cycle for Management of Clinical Problems. Answer: Introduction: Gibbs reflective cycle can be defined as the theoretical model by which individuals can effectively use it as a framework and thereby reflect on the experiences gained to develop skills and knowledge. Researchers have often liked the procedure of reflective practice for students as it gives them the scope of studying their own experiences and thereby improve their working ways to achieve success. They are extremely useful for healthcare professionals as this mode of learning gives them the cope to develop new insight and learn throughout their lives. Therefore, the act of reflection is the great way that increases confidence and hence become a more proactive as well as qualified professionals. This assignment would mainly contain a reflection of the learning experiences I had developed about the cultural competence required by nurses in their practice and this would help me to provide a safe as well as culturally competent care. Gibbs reflective cycle: Description stage: In this stage, the student needs to describe the events that had taken place. Before the initiation of the course, I was not aware about the ways that how culturally incompetent care is associated with negative outcomes of the health of the native people. I already had ideas that their culture is different from ours but was not aware about the exact ways by which they were different. Before, the coursework I had attended one aboriginal patient in the placement where my approach of treatment was not at all culturally competent. The patient had become upset and had left the place without further treatment. Later, after I had gone through the coursework I had developed huge amount of knowledge and had been able to understand the different mistakes that I had made during the treatment of the patient. Feeling: I was extremely happy and satisfied after my coursework was completed. This is because I got the scope of learning, any important things that would have great contribution in making me a culturally competent nurse. I was very excited as I developed the idea that I would from now on be able to provide the best culturally competent care to native people. This would ensure their satisfaction and high quality life. Evaluation: This stage mainly says what was good and bad about the experience. The best part of the learning experience was that it made me competent enough by which I can handle native people respectfully. This course helped me learn about the different cultural traditions, preferences as well as inhibitions of the native people and hence the care that would be provided by me would keep these considerations in mind. I would be able to interact with them in a way by which I can maintain their dignity and autonomy and help them to be satisfied with the treatment. This treatment helped me to learn ways that that would help the native patients to align with the recommendations and suggestions I give. This would help them to develop quality lives (Jacob et al., 2016). However, the only negative part of the experiment was that it was quite strenuous and energy draining. A large number of chapters need d to be covered and it was creating huge pressure on me. I was drained out physically and mentally b ut my will helped me to adhere with the coursework. Analysis: In this stage, the individuals need to make sense of the situation. This coursework was helpful to me in a large number of ways. This coursework taught me how to develop my cultural communication skills with the native people. This can be described with the help of examples. While caring for native people, huge amount of importance is given to developing rapport with them as native people trusts the building and maintaining of relationships (Hunt et al., 2015). Therefore, this coursework helped me to guide that it is very important for me to introduce myself physically and mentally in a warm and friendly way. I should try to make them feel comfortable be providing details about me, discussing things of common interest and many others. While nurses should take time to build rapport with the native people, so much time is not required for non-native people as they open easily and connect with nursing professionals easily (West et al., 2018). Moreover, they do not like direct questionin g about their personal lives and so the nursing professionals need to incorporate indirect questioning mechanisms to make them reveal their concerns and issues regarding personal lives (Brown et al., 2017). Another very important thing, which is taught to me by the coursework, is maintenance of proper body language. I need to exhibit proper nonverbal communication skills as improper skills may hurt the sentiments of the native people and make them demoralized and depressed (Jacob et al., 2016). They do not like eye contact with each other as it is considered rude and disrespectful by them unlike that of the non-natives who put stress on eye contact for effective communication and relationship building. Moreover, non-natives do not like silence in the midst of the conversation and always try to fulfill it as they feel this to develop sense of suspicion or shows lack of confidence of the speakers (Power et al., 2016). In case of the non-aboriginals, silence is considered extremely imp ortant and is taken as norm of communication. The coursework helps us to learn about all these aspects and thereby it had greater contribution towards me in developing culturally competent care practices. Conclusion: In this step, the students need to explain what other things he could have been done by the student. Initially, when I had not taken up the coursework, I should not have taken chances with the treatment of the patient. I should have completed the coursework and then treated the patient with a proper experience. Researchers are of the opinion that nursing professionals should only undertake activities that they are knowledgeable and confident about (Power et al., 2016). Besides, the coursework I could have also attended workshop classes which could have helped me to develop my skills. However, the coursework was strenuous and therefore, I could not undertake such actions. Action plan: In this stage, the students need to state what other activities could have been taken by them at that time. In any such situations in my career, I will never take up any activities upon which I have no knowledge or confidence. A healthcare professional should not affect the dignity and autonomy of the patient by providing them culturally incompetent services (West et al., 2018). I should first develop knowledge about the culture of the patient and then attend the patient for treatment. Conclusion: Therefore, it is very important for all students to use Gibbs cycle to reflect their learning experiences. This would help them to develop their skills by learning for experiences and emerge as better professionals in future. References: Brown, D., Edwards, H., Seaton, L., Buckley, T. (2017).Lewis's Medical-Surgical Nursing: Assessment and Management of Clinical Problems. Elsevier Health Sciences. Hunt, L., Ramjan, L., McDonald, G., Koch, J., Baird, D., Salamonson, Y. (2015). Nursing students' perspectives of the health and healthcare issues of Australian Indigenous people.Nurse education today,35(3), 461-467. Jacob, E., Raymond, A., Jones, J., Jacob, A., Drysdale, M., Isaacs, A. N. (2016). Exploration of nursing degree students content expectations of a dedicated Indigenous health unit.Collegian,23(3), 313-319. Power, T., Virdun, C., Sherwood, J., Parker, N., Van Balen, J., Gray, J., Jackson, D. (2016). REM: A collaborative framework for building indigenous cultural competence.Journal of Transcultural Nursing,27(5), 439-446. West, R., Mills, K., Rowland, D., Creedy, D. K. (2018). Validation of the first peoples cultural capability measurement tool with undergraduate health students: A descriptive cohort study.Nurse education today,64, 166-171.

How to Write a Sample Reflective Essay Introduction

How to Write a Sample Reflective Essay IntroductionSample reflective essay introduction is a very important article on the web site and also in your novel. It's essential that you know this simple format.In the pre-schools and day care centers we always write an essay with the arrival of the first grade and before the sixth grade. At first it was very difficult to learn because most parents had chosen a very small boarder or pen and paper for the home reading, however, now, these days, there are many online forums where the children can discuss their answers in detail.When the school year comes, you will have many fun things to do, such as visiting the schools, drawing some pictures and learning a lot. You could probably even start making your own and you will not have to go back to school. We say, 'all children know to have fun and have the joys of life'.When I was growing up, we were all very keen to find a parent who could teach us how to speak and write as a young girl, but we go t frustrated. The most common topics we always had been animals, horses, dinosaurs, and then college. The funniest thing is, that our mother said, 'You'll know what to say, but you'll never say it!'But, learning is an important task and you can't ever say the right thing. A mother said, 'It takes you a while to learn grammar' or, 'No one can explain grammar to you,' and most parents believe in these beliefs. What they don't realize is that even if you get a lot of knowledge on how to speak and write, you'll never be able to put it into practice. But, you're actually doing the next best thing by reading and writing as a child.So, sample reflective essay introduction is a simple way of demonstrating the knowledge. There is a little collection of the most popular pre-school and day care writing strategies and you can download this free for your children. And, if you know someone who is really interested in this, then you might consider having your own online writing teacher so you coul d be on the same page.You might be wondering, 'how to write a sample reflective essay introduction?' There are many strategies that you could use for this, depending on how much free time you have.

Charles Gibsons Case and the Role of a Nurse Educator in the Education of the Nursing Staff

Introduction The nurse educators play a crucial role in the development of new nursing staff. Apart from teaching theory, nurse educators must prepare the students to work in the clinical setting, think critically, and use the modern means of communication to obtain evidence-based data. In addition, nurse educators need to encourage passion and desire to work in the learners.Advertising We will write a custom assessment sample on Charles Gibson’s Case and the Role of a Nurse Educator in the Education of the Nursing Staff specifically for you for only $16.05 $11/page Learn More To teach the students properly, a nurse educator needs to have an in-depth knowledge of the pathophysiologic mechanisms of diseases (to explain to the students how a disease harms the organism), the associated physical assessments (to teach them how to identify/diagnose diseases), and the pharmacologic implications for care (so the students may prescribe the appropriate drug s). In this paper, we will study the case of Charles Gibson, an imaginary patient who has suffered from an ischemic stroke, and offer recommendations concerning the prescription of medications to him. We will also take a closer look at the role of the nurse educator in the students’ professional development. Charles Gibson’s Case Mr. Gibson was diagnosed with an ischemic stroke when he arrived at the hospital. He was treated with the tissue plasmogen activator. Recently, he was moved from the emergency department to the rehabilitation unit. According to the post-stroke MRI, the patient had no worsening ischemia, and had reperfusion in the affected area of the brain. The patient can consume nectar-thick foods; it is planned to move him to soft diet if swallow evaluation results are good enough. He also has difficulty speaking; the problems appear to have motor origins. Mr. Gibson identifies words when he is shown pictures with items for everyday use. His current physica l assessments are within the normal: the heart rate is 82 with normal sinus rhythm; the blood pressure is 130/80; the respiratory rate is 18, regular (the normal RR for people of Mr. Gibson’s age is 12-28 (Rodrà ­guez-Molinero, Narvaiza, Ruiz, Gà ¡lvez-Barrà ³n, 2013)); the oxygen saturation is 96% on 2 L/min; the body temperature is 98.6 F. On the whole, the patient’s condition seems to be favorable. He is apparently recuperating from his ischemic stroke.Advertising Looking for assessment on health medicine? Let's see if we can help you! Get your first paper with 15% OFF Learn More There are a number of factors that have predisposed the patient to the ischemic stroke. First, the patient had hypertension before the stroke (and refused to take medications for it); the vessels that are constantly tense can lead to a lack of blood supply, which increases the chance of an ischemic stroke. Second, diabetes is also a risk factor (Hewitt, Guerra, del Carmen Fernà ¡ndez-Moreno, Sierra, 2012); high sugar in blood damages many organs, including the vessels: the tunica intima loses its smoothness, which increases the risk of blood clotting. Third, smoking is also a factor that greatly increases the likelihood of a stroke; among the most known mechanisms are hypercoagulability (thrombophilia) and atherosclerosis (fibrofatty plaques inside the vessels) (Edjoc, Reid, Sharma, Fang, 2013). Fourth, the patient had the habit of eating all kinds of food, including junk food; apart from being a factor that increases the risk of stroke directly, it also exacerbates the patient’s diabetes. Fifth, the patient is overweight (weight: 250 lbs, height: 6 feet), which also stimulates the formation of plaques in the arteries, thus increasing the likelihood of thrombi, and, consequently, a stroke. To identify the specified pathophysiological problems that led to the stroke, it is essential to gather information about the patient’s habits, a s well as to obtain some clinical data. To know about the patient’s hypertension, it is necessary to monitor his blood pressure regularly for a period of time – to identify the persistently high BP. To find diabetes, it is important to control the level of sugar in the blood; the blood for the tests must be taken on an empty stomach, because the levels of sugar in blood increase after an intake of food. The rest of the named factors that increase the risk of a stroke are more apparent (because they are related to the lifestyle, such as eating junk food or smoking cigarettes, or because they are rather obvious, such as being overweight). To identify the pathophysiological problems caused by the ischemic stroke (the lack of blood supply to the brain), it is possible to look at the consequences of the stroke. The LoC (level of consciousness) test can be used not only to identify the severity of stroke; it includes a number of symptoms typical of a stroke, many of which ar e a loss of a certain function. Other tests may be used to identify the lost or damaged functions. Finally, a CT or MRI scan can be used to identify the area where the stroke occurred (ÃÅ"nlà ¼er et al., 2012); this information can be utilized to understand which functions are likely to have been impaired.Advertising We will write a custom assessment sample on Charles Gibson’s Case and the Role of a Nurse Educator in the Education of the Nursing Staff specifically for you for only $16.05 $11/page Learn More The only psychological problem mentioned in the description of Mr. Gibson’s case after he has been moved to the rehabilitation unit is that he â€Å"expresses remorse about not ‘being able to do what he did before’†; however, he stays motivated. Therefore, he apparently does not suffer from serious psychological disorders. However, such disorders still may be present. A psychologist’s examination might be us eful. The patient has suffered from an ischemic stroke. Pathophysiologically, it affects the function of blood circulation by creating an obstacle for the blood (an occluded vessel in the brain) and preventing it from reaching certain tissues in the brain. The brain tissues deprived of the blood supply stop performing their functions and start dying. The person may lose their ability to do different actions, and may achieve a disability; the types of abilities lost depend on which part of the brain has suffered from the ischemia. The disability may be permanent (and a stroke can also be lethal, of course); however, if the stroke was not too severe, and the blood supply was restored rapidly, the damage might not be so critical, and some of the living neurons may gradually adopt the function of the tissues that died, restoring the patient’s ability to perform certain actions, but this often may require additional training. Mr. Gibson has difficulty speaking, and the problem see ms to have motor origins. This means that he is capable of understanding words and formulating his thoughts using words in his mind, but he is unable to properly pronounce the words due to the damage to the parts of the brain that are responsible for moving speech muscles. It is possible that his ability to speak will be eventually restored, but a certain amount of time, and, quite possibly, special training (speech therapy) may be required. Psychologically, Mr. Gibson might start suffering from e.g. depression due to his inability to perform certain activities (especially if it turns out that he is incapable of performing everyday activities). However, as it was mentioned, currently the patient stays motivated. It is important to support him via e.g. occupational therapy, and, of course, various types of encouragement and motivation (Carey, 2011); the OT might also allow him to restore some of his lost abilities, if he has lost any. Pharmacologic Treatment Plan for Charles Gibson T he offered medications are as follows:Advertising Looking for assessment on health medicine? Let's see if we can help you! Get your first paper with 15% OFF Learn More Metformin 1000 mg PO every 12 hours – an anti-diabetic drug that is often used for overweight people. We would recommend using this medication, but monitoring the levels of sugar in blood. The patient had bad dietary habits, and now his diet has completely changed; it is necessary to check whether the dose is adequate. The levels of sugar should be checked until the patient starts having a (relatively) stable diet (currently, it is being considered whether to move him from nectar-thick foods to soft diet). Enteric coated aspirin 81 mg PO every day – lowers the chances of blood clot formation. Use, but monitor the possibility of hemorrhagic stroke, for it may increase due to aspirin (Doutremepuich, Aguejouf, Desplat, Eizayaga, 2012). Also, ensure that the patient is not aspirin-resistant (Topà §uoglu, Arsava, Ay, 2011); if he is, the aspirin may be replaced by e.g. warfarin. Persantine (dipyridamole) 75 mg PO every day – also lowers the chance of blood clot f ormation. Administering it with aspirin means that if one of the medications is ineffective, the other will have an impact. However, perhaps it would be reasonable to start giving them gradually, not on the same day, to see whether they produce an effect. It also should be noted that if aspirin is ineffective, dipyridamole can be combined with warfarin. Losartan 75 mg PO every day – used for hypertension. The patient needs some hypertension medications, and Losartan is an appropriate choice. Amiodarone 200 mg PO every day – an anti-arrhythmic drug. The patient had atrial fibrillation when he arrived at hospital, but currently he has a normal sinus rhythm, and it is uncertain whether this condition will relapse again. On the other hand, atrial fibrillation, if it was persistent, may have damaged the tissues of the heart, making a relapse more likely (Kowey, Mohmand-Borkowski, Burke, 2011, pp. 33-39), which is especially dangerous after a stroke, because strokes also of ten relapse (Ostwald, Godwin, Ye, Cron, 2013). So perhaps it is justified to give him Amiodarone, especially when the dose is not high – 200 mg daily. We could also recommend using: d-amphetamine, 10 mg once every four days for 10 sessions, in conjunction with physical therapy. It is stated that some experiments have shown positive results in patients with motor impairments and aphasia after a stroke (Stein, Harvey, Winstein, Zorowitz, Wittenberg, 2015, ch. 12). This treatment may be offered to Mr. Gibson as experimental. Nurse Educator’s Role in Developing Students The nurse educator plays an important role in developing student’s professionalism. Apart from advancing their knowledge by providing theoretic information, the nurse educator has to develop the student’s practical skills of caring for the patients, and develop their abilities so they may use them effectively in the clinical setting. In other words, the nurse educator has to link the medi cal and nursing theory with the clinical practice, develop the learners’ natural abilities, and boost their passion for caring for patients. Critical thinking in nursing comprises the use of logic and intellect in combination with the analysis of the data from the current research to provide patients with the care and medical assistance of the highest quality. The nurse has to be clear and precise in their judgments to eliminate possible mistakes or irrelevant information when caring for their patients. To develop critical thinking, clinical judgment, and innovative communication in their students, nurse educators may use two following strategies: 1. Give the students tasks which require self-reliant research and analysis. For instance, it is possible to give the students case studies with imaginary patients who have diseases that the learners have not studied before (but, clearly, they must have enough background knowledge to figure it out). The students will learn to act in a situation when they have to gather information about a disease unknown to them (using the innovative means of communication, for instance, by searching medical databases), combine it with their current knowledge (develop critical thinking), and prescribe the treatment for the patient (use clinical judgment). 2. Another option is to create a â€Å"role game† where a nurse has to deal with a patient (who has a disease that requires the nurse to look for new data to treat it properly), as well as with other individuals involved in the process of treating and caring: relatives, multiple physicians, other nurses. This situation contains the benefits of the previous approach, developing the critical thinking, clinical judgment, and innovative communications skills in the same way, but it also adds additional practice of clinical judgment, for the nurse has to take into account the wishes, attitudes, and opinions of the other parties. To realize this method in practice, it is pos sible to use the virtual reality. Conclusion To sum up, we have studied the case of Charles Gibson, evaluated his physical assessments, described the pathophysiological mechanisms of his disease, and provided pharmacological options for his treatment. We have also explained the role of a nurse educator in the nurse teaching process. It is important to stress that understanding patients on an in-depth levels helps the nurse educator develop their students’ skills by e.g. showing how important the information and attitudes of the patients are for their treatment. References Carey, L. M. (Ed.). (2011). Stroke rehabilitation: Insights from neuroscience and imaging. New York, NY: Oxford University Press. Doutremepuich, C., Aguejouf, O., Desplat, V., Eizayaga, F. X. (2012). Paradoxical effect of aspirin. Thrombosis, 2012, 1-4. doi:10.1155/2012/676237 Edjoc, R. K., Reid, R. D., Sharma, M., Fang, J. (2013). The prognostic effect of cigarette smoking on stroke severity, disability, l ength of stay in hospital, and mortality in a cohort with cerebrovascular disease. Journal of Stroke and Cerebrovascular Diseases, 22(8), e446-e454. Web. Hewitt, J., Guerra, L. C., del Carmen Fernà ¡ndez-Moreno, M., Sierra, C. (2012). Diabetes and stroke prevention: A review. Stroke Research and Treatment, 2012(12), 1-6. doi:10.1155/2012/673187 Kowey, P., Mohmand-Borkowski, A., Burke, J. (2011). Clinical management of atrial fibrillation (1st ed.). West Islip, NY: Professional Communications. Ostwald, S. K., Godwin, K. M., Ye, F., Cron, S. G. (2013). Serious adverse events experienced by survivors of stroke in the first year following discharge from inpatient rehabilitation. Rehabilitation Nursing, 38(2), 254-263. Web. Rodrà ­guez-Molinero, A., Narvaiza, L., Ruiz, J., Gà ¡lvez-Barrà ³n, C. (2013). Normal respiratory rate and peripheral blood oxygen saturation in the elderly population. Journal of the American Geriatrics Society, 61(12), 2238-2240. doi:10.1111/jgs.12580 Stein, J., Harvey, R. L., Winstein, C. J., Zorowitz, R. D., Wittenberg, G. (2015). Stroke recovery and rehabilitation (2nd ed.) [Google Books version]. Topà §uoglu, M. A., Arsava, E. M., Ay, H. (2011). Antiplatelet resistance in stroke. Expert Review of Neurotherapeutics, 11(2), 251-263. doi:10.1586/ern.10.203 ÃÅ"nlà ¼er, E. E., Yaka, E., Akhan, G., Limon, Ãâ€"., Kara, P. H., YavaÅŸi, Ãâ€".,†¦Kutluk, K. (2012). Ability of emergency physicians to detect early ischemic changes of acute ischemic stroke on cranial computed tomography. Medical Principles and Practice, 21(6), 534-537. Web. This assessment on Charles Gibson’s Case and the Role of a Nurse Educator in the Education of the Nursing Staff was written and submitted by user Parker Holder to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

Characteristics of Blanch and Stanleys Relationships in The Streetcar Named Desire by Tennessee Williams

Characteristics of Blanch and Stanleys Relationships in The Streetcar Named Desire by Tennessee Williams A Streetcar Named Desire by Tennessee Williams is a classic of American theater. Thomas P. Adler said that â€Å"it was the finest play ever written for the American stage† (Kolin 1). Exactly this play determined the author’s themes, thoughts and ideals. Advertising We will write a custom essay sample on Characteristics of Blanch and Stanley’s Relationships in â€Å"The Streetcar Named Desire† by Tennessee Williams specifically for you for only $16.05 $11/page Learn More According to Harold Klerman, it is the only play that describes the personality, society and depicts realistically the reality of that time. The setting of the play took place in contemporary times. It is a story of a decline of a Southern lady Blanche DuBois. In this play, Williams disclose a wide range of themes. Among them are the themes of domestic violence, relationships of men and women, the fantasy and its confrontation with reality. One of the most import ant themes of the play turns around the relationships of the main characters, Blanche DuBois and Stanley Kowalski. These are two characters that are put in opposition. The climax of their opposition is the Stanley’s rape of Blanche. On one hand, this episode depicts a cruel attitude and immoral behavior, â€Å"Stanley is wrong and Blanche is right, the moralists agree† (Fleche 500). On the other hand, Blanche’s rape was inevitable (Fleche 500). And through the characterization of Blanche and Stanley’s relationship, I will argue that Blanche was raped. Blanche DuBois comes to New Orleans to her sister Stella married to rude and down-to-earth man Stanley Kowalski. Blanche and Stanley did not like each other from the very first second they met each other. Blanche saw Stanley beat his wife and behaved as an animal, â€Å"the primary example of physical abuse against Stella occurs in Scene Three, when drunk and angry, Stanley first tosses the radio out the w indow and then charges after his pregnant wife and strikes her† (Koprince 46). Stanley is showed as a brutish person without moral qualities. However, Blanche is also not â€Å"an angel†. Her previous life is not perfect and all the manners and tenderness is just a mask to hide her â€Å"dark† past and alcoholism. The only person who suspects her and wants to show her real face to everybody, â€Å"and yet it seems natural to read A Streetcar Named Desire as an allegorical journey toward Blanches apocalyptic destruction at the hands of her executioner, Stanley† (Fleche 504).Advertising Looking for essay on american literature? Let's see if we can help you! Get your first paper with 15% OFF Learn More As it has already been mentioned, these two characters are put in opposition, however we cannot say that this is an opposition of good and evil. Thus, Blanche appears as a young, beautiful, and unhappy woman who survived the suicide of her husband and wants to start all over again. For the first time, we see her elegant and tender. The first impression is absolutely positive. She is so light and smart, she knows French and music. However, we do not know much about her past and it is also suspiciously. We guess that she lies and Stanley helps us understand it. The author is sympathetic to his heroine. He does not idealize her, on the contrary, he is quite objective: he shows her live to whiskey and relations with men after her husband’s death. â€Å"Blanche who has never spoken an honest word in her life is allowed, indeed encouraged, to present her life to the audience as a vocational decision†¦Ã¢â‚¬  (Toles 119). The â€Å"impurity† of Blanche’s past suggests the final of the play and it is a quite logical completion of the story. The truth cannot be hide and everybody should pay for his/her actions. Blanche planned to marry Mitchell, but sooner or later, he would find out about her â€Å"sins†, â€Å"she cannot escape the status of victim, on many fronts, nor avert the plans which have led to her committal† (Toles 117). She could not expect other attitude to herself, especially in that social layer with it principles and relations between men and women. Thus, the character of Blanche can be interpreted as positive and negative at the same time, on the one hand â€Å"she has been enshrined as a hallowed representative of the Old South, a secular saint. On the other, negatively, she has been branded a nymphomaniac, a liar, an infectious source of destructive feminine desire† (Kolin 3). With this â€Å"image† of a liar and nymphomaniac Stanley fought. Stanley appears as a person with animal nature. He drinks bear all the time, â€Å"copulates, play games, smashes light bulbs, paws through Blanche’s wardrobe, throws plates on the floor, even commits rape† (Cardullo 29). Stanley is a representative of a dark reality. He embodies the â€Å"prototypical batterer†. According to Susan Koprince, he has all signs of such person. â€Å"He is hypermasculine, believes in mail’s superiority and has dual personality† (50). Those traits make him hate Blanche. Advertising We will write a custom essay sample on Characteristics of Blanch and Stanley’s Relationships in â€Å"The Streetcar Named Desire† by Tennessee Williams specifically for you for only $16.05 $11/page Learn More First of all, he hates her aristocratic past and he is outraged by her attempts to fool him showing that she is better than he and his friends. This is contradictory to his image of a woman. It makes him look for â€Å"dark spots† in her past and he finds them. Stanley does everything to ruin life of this woman. It seems to be cruel and basely. However, he is the only person who supported the truth and â€Å"justice† and reality. Stanley is a dark version of the s alesman, selling the idealistic Blanche a harsh reality on the specious grounds that it is somehow good for her and willing to use force, if necessary, to make the sale.† (Cardullo 30). The result of the confrontation of Stanley and Blanch was the rape. However, it cannot be considered as a cruel violation. Neither the context, nor the scene manifests it. In her article, Anna Fleche says, â€Å"she is the erring woman who gets what she asks for (her realistic antecedents are clear)† (507). This is the way other men treated her, this is what she expected, this is how a logical flow of things should be like. All the situation and Blanche herself â€Å"suggests† rape to Stanley. If other men did it, why he cannot? Moreover, she does not resist but sinks on her knees and remains â€Å"inert†, â€Å"She is not only silent but crumpled, immobile, while he takes over control and agency† (Fleche 508 ). Thus, the scene of the rape denies any emotions, it is a conflict that arises between two characters. In addition. With this action Stanley returned Blanche to reality. As George Toles mentions, â€Å"Stanleys casually violent gesture recalls the rape and, less malevolently, repeats the realists inalterable lesson: those who live entirely in dreams will perish† (130). Thus, Blanche and Stanley are two characters put in opposition. Neither of them is perfect. Blanche lives with her dream and she constantly lies to hide a cruel reality and her real past. Stanley is a representative of this cruel reality which opens Blanche’s eyes through the violent action. However, both, with context, main characters’ traits of character and actions, especially in the scene of a rape, the author coverts the meaning of the rape. Now, it is not just the act of violence, but the conflict that shows who is who in the play.Advertising Looking for essay on american literature? Let's see if we can help you! Get your first paper with 15% OFF Learn More Cardullo, Robert James. â€Å"Selling in American Drama.† Helen Dwight Reid Educational Foundation. (2007): 29-33. Fleche, Anne. â€Å"The Space of Madness and Desire: Tennessee Williams and Streetcar.† Modern Drama. Vol. 38. Issue 4. (1995): 498-509. Kolin, Phillip. Williams. A streetcar named Desire. New York: Cambridge University Press, 2000. Print. Koprince, Susan. â€Å"Domestic violence in A Streetcar Named Desire.† Southern Studies. Vol 7. Issue 2. (1996): 43-55. Toles, George. â€Å"Blanche Dubois and the kindness of endings†. Raritan. Vol 14. Issue 4. (1995): 115-144.

Short answer 3 Essay Example | Topics and Well Written Essays - 750 words

Short answer 3 - Essay Example One of the key elements of the union’s struggle was related to social movement unionism. Staley workers played an integral role in motivating the union members and other public to raise their voice against unlawfulness and the exploitation of rights of the workers. Members of the union worked on the strategy of reaching the community to create a grassroots support network in order to get the workers involved in the struggle. Staley workers not only organized their efforts to gather the required support for the movement but also made use of non-violent civil disobedience for the cause. The most effective part of the struggle was that the union members tried to motivate and gather people even without much involvement of an effective leadership. The Staley workers’ activism proved to be the greatest effort of the union activists in this regard as they successfully brought a lot of workers on a single platform. The union members effectively organized the movement by involving the Staley workers in the struggle which not only revealed social movement activism in their fight but also left a message for future generations that struggle is always the first step towards achievement of a common goal regardless of the result. In order to be effective, there should have been a proper support and communication with international UPIU in order to avoid the major pitfall. Secondly, they should not only have developed a result-oriented strategy but should also have listened to the advice of other larger unions in order to succeed in the struggle. If I would have been one of the union’s members, I would have made every effort to create awareness among the workers as well as local public regarding the basic aim of the movement. I would have educated them that the goal of the union is not to create disturbance or anarchy in the country; rather we want to fight for the protection of our basic labor rights. If AFL-CIO

Competitor's Analysis Essay Example | Topics and Well Written Essays - 500 words

Competitor's Analysis - Essay Example Moreover, companies such as Dental Strategy, Dental Marketing Canada, and Chrisad have experienced personnel who extend expertise and knowledge in the delivery of services. The companies such as ADEI5 and Chrisad employ advanced technology through strong online services and website design packages that leads to effective consumer analysis in marketing that has led to increased brand awareness. Most of dentistry and marketing companies located in this industry such as Art of Management Inc.6, Dental Strategy,7 and Dental Marketing Canada8 do not extensively exploit advanced technology to market their services. They lack adequate information on their websites, poor customer service, and lack of original products that limits market options. Companies such as Chrisad9, Art of Management Inc. have their headquarters outside London with many sub-branches while Dental Marketing Canada operates online services. Customer needs become difficult to meet because they lack the time and flexibility to cater to customers in London. The companies like Art of Management, Chrisad, and ADEI10 also overspend in the provision of extra services such as educational programs and comprehensive practice assessments that are not the immediate demand of the target market. The market is in need of dentistry marketing and services. This company is locally based in London, and has a fixed location that will ease consultations with clients. Chrisad Company is located outside London and only takes one client per city; they are not heavily concentrated in the Canadian market that gives us time to develop. This company will not be overwhelmed with customers like our competitors who are already established. This will provide adequate time to attend to customers, and market our company. Eventually, demand for our services will be bolstered. Since the clientele is technologically perceptive, our growing professional online

Executive Compensation and Stock Option in the UK

Executive Compensation and Stock Option in the UK 1 Introduction Todays highly competitive world consists of numerous corporations and these corporations are so huge and so large that it cannot be controlled by the people who own them. The control of these corporations is separated from shareholders who are the owners and vested into the hands of professional executives who are specifically hired for its management. This separation of ownership and control gave rise to agency problem or the principal-agent problem. Principal is referred to the stockholders and the agents are the executives who work for the stockholders. Although stockholders are the owners of the company to whom the executives are accountable, their actual powers are restricted except in the case of those corporations where stockholders are also the directors of that corporation. Stockholders have no right to inspect the books of accounts nor are they aware of the exact functioning and position of the firm. As a result, executives tend to work inefficiently without even bothering to look for profitable new investment opportunities, as well as they may use the firms assets for private purposes and also work to achieve their personal goals all at the expense of the shareholders. Some managers do not take any action whatever state or condition the corporation may be as they are risk averse and fear the threat of losing their job if a decision taken by them goes wrong. Therefore in order to avoid the various problems that arise due to the agency problem, executives must be properly and promptly compensated along with proper monitoring. In the beginning of 1990s, debates on corporate governance mainly focused on directors remuneration and fat cats. Fat cats are referred to those executives who provided themselves with huge compensation packages without any performance criteria. In UK, the most famous Fat Cat episode which saddened the shareholders of many large public companies and dragged the attention of the media was the notorious British Gas incident of the mid 1990s. Various issues arising out of executive compensation and the trouble of framing the deserved level of compensation, that has to be provided to an executive, made executive remuneration a main area of concern under corporate governance. According to Jensen (1993), providing the right level of remuneration to the executives and creating positive incentives in order to achieve the interest of the shareholders has been an important study conducted in many academic literatures. An improvement in corporate governance is brought about by filtering certain aspects of executive remuneration. There exists a wide gap between the remuneration paid to the executives and the remuneration paid to the other employees on the company. This gap keeps on increasing year after year as executives demand more and more for their services and decision making process to boosts the productivity and reputation of the firm which thereby increases the market price of the companys share. In a research mentioned in the Higgs Report (2003), chairmen of FTSE 100 companies in 2003 earned an average of  £ 426,000 as remuneration. Moreover, executives are being rewarded with stock options which would enrich them with abnormal profits in the future when the options granted to them are exercised. Critics argue that, executives are not worth for the remuneration paid because of their poor and unsatisfactory performance. According to Blitz (2003), MORI a leading market research company in the UK, through a survey, found 78% of the people unsatisfied by the remuneration paid to the executives. The pu blic in UK believe that executives are being overpaid for the amount of work they actually do. 2 Methodology This paper is a critical review on the various aspects of executive compensation in the UK and how the executive compensation especially the executive stock option encourage the managers and top executives, for their personal benefit, to take short term high risks and boost up the current value of shares rather than looking into the future and acting in favour of the stakeholders of the company. The tools used for the research mainly consist of various literature reviews of past articles and current working papers with some analysis of some statistical data regarding executive compensation. On the basis of the above mentioned area of research certain questions have been framed which will be critically looked into: a) Brief description of the executive compensation and corporate governance in the UK. b) Basic structure of executive remuneration in the UK and their disclosure requirements in United Kingdom. c) Are stock options considered the best means of remuneration in an executive compensation package? d) A brief historical overview of the introduction of executive stock option in the UK. e) What are the various manipulations done with executive stock option and what are the risk incentives created by executive stock option? f) Brief comparison of the UK executive compensation with the US executive compensation. g) The role of executive compensation in the UK banking towards the current financial crises. 3 Executive Compensation and Corporate Governance in the United Kingdom: During the past decade, various issues on corporate governance established the emergence of many reports and codes of best practice in the United Kingdom. These include the Inland Revenue (1988), Cadbury Report (1992), Greenbury Report (1995), Hampel Report (1998), The Combined Code (1998), Hermes Statement on Corporate Governance and Voting Policy (1998), Internal Control: Guidance for Directors on the Combined Code (Turnbull Report)(1999), Company Law Reform (1999) and Financial Services Market Act (2001) (Konstantinos Stathopoulos, Susanne Espenlaub, Martin Walker, 2003). Among these reports the Cadbury Report, Greenbury Report and the Combined Code, which emerged from the Hampel Report, focused on issues regarding executive compensation. 3.1 Cadbury Report (1992): The first guidelines of good practice on various issues of corporate governance were provided in the year 1992 by the Cadbury Committee which was established in May 1991 and was chaired by Adrian Cadbury. The Cadbury Committee discussed issues that were broader in nature than the executive remuneration but certain suggestions the committee made on altering the executive pay was accepted as permanent. The Cadbury report was titled as the Financial Aspects of Corporate Governance and came out with the Code of Best Practice, which insisted that decisions based on executive remunerations should not be made by the executive directors nor they have to get involved in making such a decision (1992, paragraph 4.42 p. 31). The report therefore recommended the appointment of a remuneration committee which will act in the interest of the shareholders of the firm and express a good opinion on various matters regarding executive compensation to the board. Companies in the UK responded spontaneousl y to this recommendation made in the Cadbury Report and established a remuneration committee within the firm (Bostock, 1995). The remuneration committee consists of a non-executive director as the chairperson and non-executive directors as its members who are all independent and free from the influence of the management. According to Williamson (I985), there always arises a question of doubt whether the directors make remuneration contracts for their own huge benefits and sanction it, if an independent pay committee does not exist. The role of remuneration committee is to ensure that executive compensation levels are set up in a formal, transparent way along with the goals required to be achieved by the executives for any schemes that are performance related. The remuneration committee can take advice from outside sources whenever necessary. The Cadbury report also suggested the establishment of an audit committee within each company which comprises of three non-executive directors (Martin Conyon, Paul Gregg and Stephen Machin, 1995). According to a questionnaire survey conducted by Conyon and Mallin (1997), by 1995, 98% of the companies followed the suggestions made by the Cadbury report and has reported the involvement of the remuneration committee in their annual reports. 3.2 The Greenbury Report (1995): Cadbury report failed to provide detailed guidance on how compensation packages have to be structured. However, it pointed out executive compensation to be the main area of study for the next committee known as the Greenbury Committee. The Greenbury Committee chaired by Sir Richard Greenbury, was formed by the United Kingdom Confederation of Business and Industry, and in 1995 it submitted the Greenbury report which dealt with matters regarding the determination and accounting of top executive pay. The main issues discussed in the Greenbury Report includes the role of the remuneration committee in an organisation, the disclosure requirement required by the shareholders of the organisation, the remuneration policies for compensating the executives and the service contracts provided to the executives. The remuneration policies recommended in the Greenbury Report are: a) Compensation packages must be provided by the remuneration committee to quality executives in order to influence, sec ure and encourage them and any payments extra to this intention must be avoided (Greenbury Report Paragraphs 6.5 – 6.7). b) The payments made and the subsequent resulting performance by other companies in the same industry must be evaluated by the remuneration committee. On the basis of this evaluation, the remuneration committee should relatively place their company (Paragraphs 6.11 – 6.12). c) While making changes to the annual salary of the executives, the remuneration committee should look into the payment and employment situations in other areas of the company rather than only concentrating on the executive pay and increasing them so as to satisfy the executives (Paragraph 6.13). d) The part of remuneration that is related to performance should be designed in such a way that the executives incentives go hand in hand with the interest of the shareholders and the executives are motivated to perform their duties with high standards (Paragraph 6.16). e) The performan ce conditions for executives to avail their annual bonuses, if any, should be designed to support and widen the operations of the business. The maximum possible amount of annual bonus an executive can avail should be taken into consideration by the remuneration committee and in some cases a part of these bonus payments can also be made by shares (Paragraphs 6.19 – 6.22). f) Under the long term incentive scheme, the Greenbury Report suggested that the shares and options granted to the executives should neither vest nor be exercisable, at least for a period of 3 years after such grant. The remuneration committee should encourage its executives to keep possession of their shares, after its vesting or exercise, for a long period of time (Paragraphs 6.23 – 6.34). g) The present existing long term incentive scheme should either be replaced by the new incentive scheme proposed or, the new incentive scheme proposed when combined with the old existing scheme should formulate a well structured incentive plan. The remuneration committee should make sure that the new long term incentive plan does not pay in excess than what is actually required for the executives and this new plan is accepted by the shareholders (Paragraph 6.35). h) The criteria for any long term incentive grant should be challenging and the performance of the executives should help achieve the goals set by the company in order to stand out from rest of its competitors. Key variables like the total shareholders return are used to judge the performance of the company with respect to its competitors (Paragraphs 6.38 – 6.40). i) Executive stock option grant or any other long term incentive grant must not be presented in lump-sum but should be awarded in series of stages. Moreover, no discount should be provided to the executives on the issue of executive stock option (Paragraph 6.29). j) While increasing the annual basic salary of the executives, the remuneration committee should look in to the effect of such increase on the executives pension entitlement and on the future expenses of the company particularly in case of those executives who are nearing retirement. The annual bonuses paid or any benefits paid in kind are not entitled for any pension payment (Paragraph 6.42 – 6.45). The aim of the Greenbury Report was not to cut down the executives remuneration but was to establish a balance between the compensation paid to the executives and their respective performance. On publishing the report in 1995 by the Greenbury Committee, certain tax advantages that was permitted on newly issued share options which comes under the approved executive share option scheme was withdrawn by the UK government. A new type of option scheme was introduced in November 1995 which had an upper limit of only  £20,000 on individual option holdings. Further, executive share options whose exercise price was earlier accepted at a discounted price of 15% on the existing share price at the time of grant was prevented (Konstantinos Stathopoulos, Susanne Espenlaub Martin Walker, 2003). According to Conyon (1994) in UK, the top executive director of a company was also made member of its remuneration committee before the launch of the Greenbury Report. However, the old fashioned executive share options schemes was not benefitted from the recommendations made by the Greenbury Committee as it not only seized the tax benefits but also encouraged to substitute options with long term incentive plans which in the UK is just awarding shares and not cash. The recommendations made by the Greenbury Report were not widely accepted as many of the critics believed that the report failed to link the executive pay with the performance of the company. 3.3 The Combined Code (1998): The Combined Code of the London Stock Exchange controls the various remuneration practices adopted by the companies listed in the London Stock Exchange. It has combined the recommendations given by the Cadbury Report and the Greenbury Report in order to form a regulation for efficient remuneration practice. The annual report of the companies listed should contain in a separate section the remuneration policy adopted by the company. The Combined Code requires a statement, in the annual report, showing that the remuneration standards mentioned in the code are being followed by the company and if any set standard is not complied with, the statement should point out the reason for the non compliance. A high level of executive remuneration disclosure is also required under the combined code and clear explanations about the various compensation packages provided to each executive director and non executive director should be stated (Konstantinos Stathopoulos, Susanne Espenlaub Martin Walk er, 2003). 4 Structure of Executive Remuneration in the UK: The typical structure of executive compensation in UK comprise of base salary, annual bonus, share options and long term incentive plans along with certain additional components like restricted stock and retirement plans. In 1997, an average executive compensation package consisted of 54% of base salary, 24% of annual bonus and 22% of non cash items which include share options and long term incentive plans (Martin J. Conyon, Simon I. Peck, Laura E. Read and Graham V. Sadler, 2000). Base Salary Determination of the base salary of an executive is done by taking into consideration the base salaries paid to executives of other companies in the same industry through surveys and analysis. This system of setting up and providing base salary is known as competitive benchmarking. Certain modifications are carried out on the base salary depending on the size of the firm, thereby linking executive compensation and firm size. In UK, base salary form the major part of the total executive remuneration paid. Base salary is that component of executive remuneration which is fixed and do not vary according to the performance, experience, age, etc of the executives. A  £1 increase in the base salary is preferred by executives who are risk averse than a  £1 increase in other components of executive compensation that are variable. Annual Bonus Bonus is provided to the executives on the basis of their performance during the relevant financial year. It is provided on an annual basis and the amounts paid as bonus to each executive vary from year to year. The performance of the executives is generally measured by taking into consideration accounting numbers which can be cross checked and audited. Executives have a clear idea of their daily performance by looking at the accounting numbers and they can forecast how overall profit of the company is going to look like at the end of the year. The drawback of relying on accounting numbers for measuring performance is that it is fully under the control of the executives and if wanted executives can manipulate the accounts in order to increase their annual bonus entitlement. Share Options Share options are contracts provided to the executives that cannot be traded which gives the executives the right to buy the shares of the firm at a price that is pre-determined known as the exercisable price for a specified time period. These contracts become void and have to be surrendered if the exercisable period mentioned has elapsed or if the executive resigns from the company before the exercisable period. This component of executive compensation is looked more into detail in the later section. Long-Term Incentive Plans – Long-Term Incentive Plans are provided to the executives in order to motivate and compensate them for achieving long term performance for the company. Grant of shares is the most typical form of LTIPs provided in the UK. These shares are vested to the executives only on achieving the objectives set by the company that is related to future performance. Earnings per Share and Total Shareholders Return are the two main elements by which the performance of the company is measured in the UK. Retirement Plans – Apart from the basic pension plans provided by the company, in UK, executives are encouraged to participate in an additional retirement benefit plan. These plans are a major source of concern because it symbolises invisible compensation. The actual value of executive retirement plan cannot be calculated by the available information provided in the books of accounts and the annual report. 4.1 Disclosure Requirement of Executives Remuneration in the UK: The Greenbury Report in 1995 identified three fundamental principles, which are accountability, transparency and performance linkage, in respect to executives remuneration. In UK, the current best practice disclosure pattern failed to compile with these fundamental principles therefore the government introduced certain necessary additions to the existing disclosure pattern. These latest requirements regarding disclosure of UK executives remuneration unifies the existing law, regulation and best practices that are mentioned in the UK Companies Act of 1985, the UK Listing Rules and the UK Combined Code of Principles of Good Governance and Code of Best Practice. The new requirement requires every company in the UK to adopt and prepare the directors remuneration report along with other necessary requirements. 4.1.1 Directors Remuneration Report (DRR): Companies listed in the London Stock Exchange should prepare the directors remuneration report for every financial year (Section 234B Companies Act) and should publish this report along with the accounts and annual report of the company (Section 244 Companies Act). The preparation of the remuneration report is done by the board of directors and not by the remuneration committee being, a committee accountable and responsible to the board and consisting only the non executive directors of the company. The remuneration of both the executive and non executive directors is clearly mentioned in the remuneration report. The fully prepared remuneration report should be filed with the registrar of companies (Section 242 Companies Act) and made available and provided to all the parties interested in the company such as the shareholders, debenture holders, and other persons who are required to attend the general meetings (Section 238 Companies Act). The remuneration report should contain all the information regarding the remuneration of the directors for the financial year completed i.e. the relevant financial year which includes disclosure of the amount receivable by the directors, whether paid or not, during the financial year as well as the disclosure of any amount paid as directors remuneration for any other period during the financial year (Companies Act, Schedule 7A, paragraph 19). The remuneration report should include the payments made to a third party for any services provided to the directors (Companies Act, Schedule 7A, paragraph 18(3)) and a statement showing the future remuneration policy of the directors. In UK, only the disclosure of directors remuneration is needed in the remuneration report. The name and information of every person who is the director, during the relevant financial year, has to be mentioned in the remuneration report. The remuneration report contains information that has to be audited by an external auditor (Companies Act, Schedule 7A, Part 3) and information need not be audited (Companies Act, Schedule 7A, Part 3). a) Information in DRR subject to audit: With regards to information subject to audit, the external auditor in his own consent should mention whether the information provided are prepared according to the necessary requirement and if any information is not complied as needed, the auditor should provide a statement showing them (Sections 235 and 237 Companies Act). The auditor will also look into disclosure information that are not subjected to audit and verify them with the company accounts as well as with the disclosure information that are audited. The various information included in the DRR that are subject to audit are: Emoluments and compensation For the services provided to the company as an executive or for any other services relating to the companys management, the salary, bonus, fees or compensation as termination of qualifying services received or receivable by the executives should be disclosed in the DRR. The overall value of non monetary benefits provided to the executives should be mentioned and the total aggregate of each kind of executive compensation provided in the relevant financial year should be compared with the previous financial year (Companies Act, Schedule 7A, paragraph 6). Share Options – The different types of shares options a company have should be mentioned along with their terms and conditions and besides each share option the total option each executive hold in the beginning of the relevant financial year as well as in the end should be disclosed. Detailed information of the various options provided during the year, its date of grant, its exercise price, date of expiry, number that have become void and number exercised and unexercised by the executives should be mentioned. If the share options are subject to any performance condition then the criteria has to be clearly described. For those shares that have been exercised, the market price during the time of exercise and for those shares unexercised ,the highest, lowest and the year end market prices have to be also mentioned. Since the disclosure of share options is a lengthy process, the aggregate of options each director hold is stated and the disclosure can be made on the basis of weighted average exercise pri ces (Companies Act, Schedule 7A, paragraphs 7-9). Long-term incentive schemes – Disclosure of scheme interests at the beginning and end of the current financial year which each executive hold must be made. Details of the type of scheme interest provided to the executives, its value and when it is vested in the year should be mentioned. If there are any conditions on the basis of which scheme interests will be granted then the relevant conditions should be specified (Companies Act, Schedule 7A, paragraphs 10 and 11). Other Information Details of executives pension scheme transfer value, any benefits that are accumulated over time and amount paid or payable by the company towards the money purchase pension scheme and retirement benefit scheme should be mentioned (Companies Act, Schedule 7A, paragraph 12). Amount received or receivable by the executives as benefits over and above the retirement benefit which he is entitled after 31st March 1997 should be included in the DRR (Companies Act, Schedule 7A, paragraph 13). If any person, who was once the executive of the company, has been given a special reward or if any third party is paid for their services provided to the executives during the relevant financial year it should be stated and disclosed (Companies Act, Schedule 7A, paragraph 14 15). b) Information in DRR not subject to audit: The information in the DRR that are not subject to audit is: Remuneration Committee – If any decision regarding the remuneration of the executives is taken by a committee during the financial year then the DRR must contain the name of all the non executive directors who were the members of such a committee and also should mention the name of any other person who is not the member of the committee but has been appointed by the members to assist them with certain services and advice. The details of the services rendered by the outside party should be clearly mentioned and this is done to ensure that the executive director play no role and influence the decision making of the committee (Companies Act, Schedule 7A, paragraph 2). Statement of policy on executives remuneration – A statement of future policy on executives remuneration for the coming financial years has to be included in the directors remuneration report (Companies Act, Schedule 7A, paragraph 3). The statement of policy should therefore disclose the conditions of performance, by an executive, for the entitlement of share option and long term incentive scheme along with the reasons for setting up such performance condition and the method used to assess the performance condition. If any executive fails meet the performance condition and does not benefit from the stock option grant or long term incentive scheme, the report should clearly state the conditions that are unsatisfactory. Details of the company on the basis of which the performance is measured should be provided in the report. Changes or amendments proposed to the existing terms and conditions for executives entitlement should be highlighted. Explanation should also provide for non-performance related remuneration and company policies on executives service contracts. This statement covers all directors from the end of the current financial year till the time when the report is put for voting by the shareholders of the company Performance graph – Publication of preceding 5 years performance graph should be included in the DRR showing the total shareholder return for holding shares whose listing transformed the company into a quoted company and for holding shares on the basis of which calculations are made for a broad equity market index. A fair method is used for the calculation of the total shareholder return along with various assumptions like the interest received on shares being reinvested (Companies Act, Schedule 7A, paragraph 4). Service Contract – During the relevant financial year if any executive is provided with a service contract, the date at which the service contract has been provided, its duration and its terms and conditions should be mentioned in the remuneration report. A detail of the termination compensation the executive is entitled to receive along with the companys liability on early termination is to be included (Companies Act, Schedule 7A, paragraph 5). On the complete preparation of the remuneration report, in the annual general body meeting it is introduced and called for a vote by the shareholders of the company (Section 241A Companies Act). This concept of voting the remuneration report was a controversial topic as many commentators suggested the voting to be limited to only the remuneration policy rather than the whole remuneration report. The reason they point out is that the executives remuneration policies are futuristic in nature so the shareholders can express their opinion on the policies adopted ra ther than making aware of the actual remuneration paid to each individual director. 4.1.2 Other Requirements: a) Along with the preparation of the DRR, disclosure of the aggregate compensation of the executive, loan given to the executives and other company transactions with the executive should be done in the notes of the annual accounts as mentioned in Schedule 6 of the Companies Act. b) As per Section 251 of the Companies Act and Companies Regulations (1995), listed companies in their summary financial statements should as a statement, state its policies regarding the remuneration of executives and the companys performance graph. 5 Stock/Share Options – Are they the Best in an Executive Compensation package? The most prominent and important component of executive compensation, in order to merge the interests of the executives with that of the interests of the shareholders, is providing the executives with stock options in the firms they serve (Jensen and Meckling, 1976). According to Jeffrey A. Williamson and Brian H. Kleiner, A stock option is a security that represents the right, but not the obligation, to buy or sell a specified amount of stocks at a specified price within a specified period of time. Stock options granted to executives of many large multinational firms are much higher in value than the annual cash pay they are entitled to be paid which in-turn boosts up the overall total compensation provided to the executives. This makes stock options the single largest ingredient in the current scenario of executive compensation. In the United States itself, stock options are held by more than 10 million employees (Simon R. and Dugan J., 2001) out of which around 160,000 of them tur ned out to be millionaires (Tate E.A. and Wilson T.E., 2001). Initially stock options were provided as a bonus to all the key executives of a company, but during the recent years its use is restricted only to the top level management. Providing stock options have resulted in increased productivity of the organisations. Executives are aware that their gain is linked with the stock performance of the organisation therefore they strive harder and work more efficiently to achieve progress. The main objective behind granting stock options is to make sure that executive make a profit on the success of the companys operations and in case of failures they suffer. Hence executive stock options link pay to performance. Critics argue to provide shares of stock rather than providing stock options in order to link pay and performance. The value of a stock option is only one third the value of a share, in case of companies having an average volatile stock price and yielding an average dividend the reason being stockholders receiving the whole value along with the dividend payment and the option holders benefitting only from the additional returns that is over and above the exercise price. This implies that options have a greater leverage and at the same cost, a company can provide its executives with options that are three times as much as that of shares. Stock options are incentive plans that are future Executive Compensation and Stock Option in the UK Executive Compensation and Stock Option in the UK 1 Introduction Todays highly competitive world consists of numerous corporations and these corporations are so huge and so large that it cannot be controlled by the people who own them. The control of these corporations is separated from shareholders who are the owners and vested into the hands of professional executives who are specifically hired for its management. This separation of ownership and control gave rise to agency problem or the principal-agent problem. Principal is referred to the stockholders and the agents are the executives who work for the stockholders. Although stockholders are the owners of the company to whom the executives are accountable, their actual powers are restricted except in the case of those corporations where stockholders are also the directors of that corporation. Stockholders have no right to inspect the books of accounts nor are they aware of the exact functioning and position of the firm. As a result, executives tend to work inefficiently without even bothering to look for profitable new investment opportunities, as well as they may use the firms assets for private purposes and also work to achieve their personal goals all at the expense of the shareholders. Some managers do not take any action whatever state or condition the corporation may be as they are risk averse and fear the threat of losing their job if a decision taken by them goes wrong. Therefore in order to avoid the various problems that arise due to the agency problem, executives must be properly and promptly compensated along with proper monitoring. In the beginning of 1990s, debates on corporate governance mainly focused on directors remuneration and fat cats. Fat cats are referred to those executives who provided themselves with huge compensation packages without any performance criteria. In UK, the most famous Fat Cat episode which saddened the shareholders of many large public companies and dragged the attention of the media was the notorious British Gas incident of the mid 1990s. Various issues arising out of executive compensation and the trouble of framing the deserved level of compensation, that has to be provided to an executive, made executive remuneration a main area of concern under corporate governance. According to Jensen (1993), providing the right level of remuneration to the executives and creating positive incentives in order to achieve the interest of the shareholders has been an important study conducted in many academic literatures. An improvement in corporate governance is brought about by filtering certain aspects of executive remuneration. There exists a wide gap between the remuneration paid to the executives and the remuneration paid to the other employees on the company. This gap keeps on increasing year after year as executives demand more and more for their services and decision making process to boosts the productivity and reputation of the firm which thereby increases the market price of the companys share. In a research mentioned in the Higgs Report (2003), chairmen of FTSE 100 companies in 2003 earned an average of  £ 426,000 as remuneration. Moreover, executives are being rewarded with stock options which would enrich them with abnormal profits in the future when the options granted to them are exercised. Critics argue that, executives are not worth for the remuneration paid because of their poor and unsatisfactory performance. According to Blitz (2003), MORI a leading market research company in the UK, through a survey, found 78% of the people unsatisfied by the remuneration paid to the executives. The pu blic in UK believe that executives are being overpaid for the amount of work they actually do. 2 Methodology This paper is a critical review on the various aspects of executive compensation in the UK and how the executive compensation especially the executive stock option encourage the managers and top executives, for their personal benefit, to take short term high risks and boost up the current value of shares rather than looking into the future and acting in favour of the stakeholders of the company. The tools used for the research mainly consist of various literature reviews of past articles and current working papers with some analysis of some statistical data regarding executive compensation. On the basis of the above mentioned area of research certain questions have been framed which will be critically looked into: a) Brief description of the executive compensation and corporate governance in the UK. b) Basic structure of executive remuneration in the UK and their disclosure requirements in United Kingdom. c) Are stock options considered the best means of remuneration in an executive compensation package? d) A brief historical overview of the introduction of executive stock option in the UK. e) What are the various manipulations done with executive stock option and what are the risk incentives created by executive stock option? f) Brief comparison of the UK executive compensation with the US executive compensation. g) The role of executive compensation in the UK banking towards the current financial crises. 3 Executive Compensation and Corporate Governance in the United Kingdom: During the past decade, various issues on corporate governance established the emergence of many reports and codes of best practice in the United Kingdom. These include the Inland Revenue (1988), Cadbury Report (1992), Greenbury Report (1995), Hampel Report (1998), The Combined Code (1998), Hermes Statement on Corporate Governance and Voting Policy (1998), Internal Control: Guidance for Directors on the Combined Code (Turnbull Report)(1999), Company Law Reform (1999) and Financial Services Market Act (2001) (Konstantinos Stathopoulos, Susanne Espenlaub, Martin Walker, 2003). Among these reports the Cadbury Report, Greenbury Report and the Combined Code, which emerged from the Hampel Report, focused on issues regarding executive compensation. 3.1 Cadbury Report (1992): The first guidelines of good practice on various issues of corporate governance were provided in the year 1992 by the Cadbury Committee which was established in May 1991 and was chaired by Adrian Cadbury. The Cadbury Committee discussed issues that were broader in nature than the executive remuneration but certain suggestions the committee made on altering the executive pay was accepted as permanent. The Cadbury report was titled as the Financial Aspects of Corporate Governance and came out with the Code of Best Practice, which insisted that decisions based on executive remunerations should not be made by the executive directors nor they have to get involved in making such a decision (1992, paragraph 4.42 p. 31). The report therefore recommended the appointment of a remuneration committee which will act in the interest of the shareholders of the firm and express a good opinion on various matters regarding executive compensation to the board. Companies in the UK responded spontaneousl y to this recommendation made in the Cadbury Report and established a remuneration committee within the firm (Bostock, 1995). The remuneration committee consists of a non-executive director as the chairperson and non-executive directors as its members who are all independent and free from the influence of the management. According to Williamson (I985), there always arises a question of doubt whether the directors make remuneration contracts for their own huge benefits and sanction it, if an independent pay committee does not exist. The role of remuneration committee is to ensure that executive compensation levels are set up in a formal, transparent way along with the goals required to be achieved by the executives for any schemes that are performance related. The remuneration committee can take advice from outside sources whenever necessary. The Cadbury report also suggested the establishment of an audit committee within each company which comprises of three non-executive directors (Martin Conyon, Paul Gregg and Stephen Machin, 1995). According to a questionnaire survey conducted by Conyon and Mallin (1997), by 1995, 98% of the companies followed the suggestions made by the Cadbury report and has reported the involvement of the remuneration committee in their annual reports. 3.2 The Greenbury Report (1995): Cadbury report failed to provide detailed guidance on how compensation packages have to be structured. However, it pointed out executive compensation to be the main area of study for the next committee known as the Greenbury Committee. The Greenbury Committee chaired by Sir Richard Greenbury, was formed by the United Kingdom Confederation of Business and Industry, and in 1995 it submitted the Greenbury report which dealt with matters regarding the determination and accounting of top executive pay. The main issues discussed in the Greenbury Report includes the role of the remuneration committee in an organisation, the disclosure requirement required by the shareholders of the organisation, the remuneration policies for compensating the executives and the service contracts provided to the executives. The remuneration policies recommended in the Greenbury Report are: a) Compensation packages must be provided by the remuneration committee to quality executives in order to influence, sec ure and encourage them and any payments extra to this intention must be avoided (Greenbury Report Paragraphs 6.5 – 6.7). b) The payments made and the subsequent resulting performance by other companies in the same industry must be evaluated by the remuneration committee. On the basis of this evaluation, the remuneration committee should relatively place their company (Paragraphs 6.11 – 6.12). c) While making changes to the annual salary of the executives, the remuneration committee should look into the payment and employment situations in other areas of the company rather than only concentrating on the executive pay and increasing them so as to satisfy the executives (Paragraph 6.13). d) The part of remuneration that is related to performance should be designed in such a way that the executives incentives go hand in hand with the interest of the shareholders and the executives are motivated to perform their duties with high standards (Paragraph 6.16). e) The performan ce conditions for executives to avail their annual bonuses, if any, should be designed to support and widen the operations of the business. The maximum possible amount of annual bonus an executive can avail should be taken into consideration by the remuneration committee and in some cases a part of these bonus payments can also be made by shares (Paragraphs 6.19 – 6.22). f) Under the long term incentive scheme, the Greenbury Report suggested that the shares and options granted to the executives should neither vest nor be exercisable, at least for a period of 3 years after such grant. The remuneration committee should encourage its executives to keep possession of their shares, after its vesting or exercise, for a long period of time (Paragraphs 6.23 – 6.34). g) The present existing long term incentive scheme should either be replaced by the new incentive scheme proposed or, the new incentive scheme proposed when combined with the old existing scheme should formulate a well structured incentive plan. The remuneration committee should make sure that the new long term incentive plan does not pay in excess than what is actually required for the executives and this new plan is accepted by the shareholders (Paragraph 6.35). h) The criteria for any long term incentive grant should be challenging and the performance of the executives should help achieve the goals set by the company in order to stand out from rest of its competitors. Key variables like the total shareholders return are used to judge the performance of the company with respect to its competitors (Paragraphs 6.38 – 6.40). i) Executive stock option grant or any other long term incentive grant must not be presented in lump-sum but should be awarded in series of stages. Moreover, no discount should be provided to the executives on the issue of executive stock option (Paragraph 6.29). j) While increasing the annual basic salary of the executives, the remuneration committee should look in to the effect of such increase on the executives pension entitlement and on the future expenses of the company particularly in case of those executives who are nearing retirement. The annual bonuses paid or any benefits paid in kind are not entitled for any pension payment (Paragraph 6.42 – 6.45). The aim of the Greenbury Report was not to cut down the executives remuneration but was to establish a balance between the compensation paid to the executives and their respective performance. On publishing the report in 1995 by the Greenbury Committee, certain tax advantages that was permitted on newly issued share options which comes under the approved executive share option scheme was withdrawn by the UK government. A new type of option scheme was introduced in November 1995 which had an upper limit of only  £20,000 on individual option holdings. Further, executive share options whose exercise price was earlier accepted at a discounted price of 15% on the existing share price at the time of grant was prevented (Konstantinos Stathopoulos, Susanne Espenlaub Martin Walker, 2003). According to Conyon (1994) in UK, the top executive director of a company was also made member of its remuneration committee before the launch of the Greenbury Report. However, the old fashioned executive share options schemes was not benefitted from the recommendations made by the Greenbury Committee as it not only seized the tax benefits but also encouraged to substitute options with long term incentive plans which in the UK is just awarding shares and not cash. The recommendations made by the Greenbury Report were not widely accepted as many of the critics believed that the report failed to link the executive pay with the performance of the company. 3.3 The Combined Code (1998): The Combined Code of the London Stock Exchange controls the various remuneration practices adopted by the companies listed in the London Stock Exchange. It has combined the recommendations given by the Cadbury Report and the Greenbury Report in order to form a regulation for efficient remuneration practice. The annual report of the companies listed should contain in a separate section the remuneration policy adopted by the company. The Combined Code requires a statement, in the annual report, showing that the remuneration standards mentioned in the code are being followed by the company and if any set standard is not complied with, the statement should point out the reason for the non compliance. A high level of executive remuneration disclosure is also required under the combined code and clear explanations about the various compensation packages provided to each executive director and non executive director should be stated (Konstantinos Stathopoulos, Susanne Espenlaub Martin Walk er, 2003). 4 Structure of Executive Remuneration in the UK: The typical structure of executive compensation in UK comprise of base salary, annual bonus, share options and long term incentive plans along with certain additional components like restricted stock and retirement plans. In 1997, an average executive compensation package consisted of 54% of base salary, 24% of annual bonus and 22% of non cash items which include share options and long term incentive plans (Martin J. Conyon, Simon I. Peck, Laura E. Read and Graham V. Sadler, 2000). Base Salary Determination of the base salary of an executive is done by taking into consideration the base salaries paid to executives of other companies in the same industry through surveys and analysis. This system of setting up and providing base salary is known as competitive benchmarking. Certain modifications are carried out on the base salary depending on the size of the firm, thereby linking executive compensation and firm size. In UK, base salary form the major part of the total executive remuneration paid. Base salary is that component of executive remuneration which is fixed and do not vary according to the performance, experience, age, etc of the executives. A  £1 increase in the base salary is preferred by executives who are risk averse than a  £1 increase in other components of executive compensation that are variable. Annual Bonus Bonus is provided to the executives on the basis of their performance during the relevant financial year. It is provided on an annual basis and the amounts paid as bonus to each executive vary from year to year. The performance of the executives is generally measured by taking into consideration accounting numbers which can be cross checked and audited. Executives have a clear idea of their daily performance by looking at the accounting numbers and they can forecast how overall profit of the company is going to look like at the end of the year. The drawback of relying on accounting numbers for measuring performance is that it is fully under the control of the executives and if wanted executives can manipulate the accounts in order to increase their annual bonus entitlement. Share Options Share options are contracts provided to the executives that cannot be traded which gives the executives the right to buy the shares of the firm at a price that is pre-determined known as the exercisable price for a specified time period. These contracts become void and have to be surrendered if the exercisable period mentioned has elapsed or if the executive resigns from the company before the exercisable period. This component of executive compensation is looked more into detail in the later section. Long-Term Incentive Plans – Long-Term Incentive Plans are provided to the executives in order to motivate and compensate them for achieving long term performance for the company. Grant of shares is the most typical form of LTIPs provided in the UK. These shares are vested to the executives only on achieving the objectives set by the company that is related to future performance. Earnings per Share and Total Shareholders Return are the two main elements by which the performance of the company is measured in the UK. Retirement Plans – Apart from the basic pension plans provided by the company, in UK, executives are encouraged to participate in an additional retirement benefit plan. These plans are a major source of concern because it symbolises invisible compensation. The actual value of executive retirement plan cannot be calculated by the available information provided in the books of accounts and the annual report. 4.1 Disclosure Requirement of Executives Remuneration in the UK: The Greenbury Report in 1995 identified three fundamental principles, which are accountability, transparency and performance linkage, in respect to executives remuneration. In UK, the current best practice disclosure pattern failed to compile with these fundamental principles therefore the government introduced certain necessary additions to the existing disclosure pattern. These latest requirements regarding disclosure of UK executives remuneration unifies the existing law, regulation and best practices that are mentioned in the UK Companies Act of 1985, the UK Listing Rules and the UK Combined Code of Principles of Good Governance and Code of Best Practice. The new requirement requires every company in the UK to adopt and prepare the directors remuneration report along with other necessary requirements. 4.1.1 Directors Remuneration Report (DRR): Companies listed in the London Stock Exchange should prepare the directors remuneration report for every financial year (Section 234B Companies Act) and should publish this report along with the accounts and annual report of the company (Section 244 Companies Act). The preparation of the remuneration report is done by the board of directors and not by the remuneration committee being, a committee accountable and responsible to the board and consisting only the non executive directors of the company. The remuneration of both the executive and non executive directors is clearly mentioned in the remuneration report. The fully prepared remuneration report should be filed with the registrar of companies (Section 242 Companies Act) and made available and provided to all the parties interested in the company such as the shareholders, debenture holders, and other persons who are required to attend the general meetings (Section 238 Companies Act). The remuneration report should contain all the information regarding the remuneration of the directors for the financial year completed i.e. the relevant financial year which includes disclosure of the amount receivable by the directors, whether paid or not, during the financial year as well as the disclosure of any amount paid as directors remuneration for any other period during the financial year (Companies Act, Schedule 7A, paragraph 19). The remuneration report should include the payments made to a third party for any services provided to the directors (Companies Act, Schedule 7A, paragraph 18(3)) and a statement showing the future remuneration policy of the directors. In UK, only the disclosure of directors remuneration is needed in the remuneration report. The name and information of every person who is the director, during the relevant financial year, has to be mentioned in the remuneration report. The remuneration report contains information that has to be audited by an external auditor (Companies Act, Schedule 7A, Part 3) and information need not be audited (Companies Act, Schedule 7A, Part 3). a) Information in DRR subject to audit: With regards to information subject to audit, the external auditor in his own consent should mention whether the information provided are prepared according to the necessary requirement and if any information is not complied as needed, the auditor should provide a statement showing them (Sections 235 and 237 Companies Act). The auditor will also look into disclosure information that are not subjected to audit and verify them with the company accounts as well as with the disclosure information that are audited. The various information included in the DRR that are subject to audit are: Emoluments and compensation For the services provided to the company as an executive or for any other services relating to the companys management, the salary, bonus, fees or compensation as termination of qualifying services received or receivable by the executives should be disclosed in the DRR. The overall value of non monetary benefits provided to the executives should be mentioned and the total aggregate of each kind of executive compensation provided in the relevant financial year should be compared with the previous financial year (Companies Act, Schedule 7A, paragraph 6). Share Options – The different types of shares options a company have should be mentioned along with their terms and conditions and besides each share option the total option each executive hold in the beginning of the relevant financial year as well as in the end should be disclosed. Detailed information of the various options provided during the year, its date of grant, its exercise price, date of expiry, number that have become void and number exercised and unexercised by the executives should be mentioned. If the share options are subject to any performance condition then the criteria has to be clearly described. For those shares that have been exercised, the market price during the time of exercise and for those shares unexercised ,the highest, lowest and the year end market prices have to be also mentioned. Since the disclosure of share options is a lengthy process, the aggregate of options each director hold is stated and the disclosure can be made on the basis of weighted average exercise pri ces (Companies Act, Schedule 7A, paragraphs 7-9). Long-term incentive schemes – Disclosure of scheme interests at the beginning and end of the current financial year which each executive hold must be made. Details of the type of scheme interest provided to the executives, its value and when it is vested in the year should be mentioned. If there are any conditions on the basis of which scheme interests will be granted then the relevant conditions should be specified (Companies Act, Schedule 7A, paragraphs 10 and 11). Other Information Details of executives pension scheme transfer value, any benefits that are accumulated over time and amount paid or payable by the company towards the money purchase pension scheme and retirement benefit scheme should be mentioned (Companies Act, Schedule 7A, paragraph 12). Amount received or receivable by the executives as benefits over and above the retirement benefit which he is entitled after 31st March 1997 should be included in the DRR (Companies Act, Schedule 7A, paragraph 13). If any person, who was once the executive of the company, has been given a special reward or if any third party is paid for their services provided to the executives during the relevant financial year it should be stated and disclosed (Companies Act, Schedule 7A, paragraph 14 15). b) Information in DRR not subject to audit: The information in the DRR that are not subject to audit is: Remuneration Committee – If any decision regarding the remuneration of the executives is taken by a committee during the financial year then the DRR must contain the name of all the non executive directors who were the members of such a committee and also should mention the name of any other person who is not the member of the committee but has been appointed by the members to assist them with certain services and advice. The details of the services rendered by the outside party should be clearly mentioned and this is done to ensure that the executive director play no role and influence the decision making of the committee (Companies Act, Schedule 7A, paragraph 2). Statement of policy on executives remuneration – A statement of future policy on executives remuneration for the coming financial years has to be included in the directors remuneration report (Companies Act, Schedule 7A, paragraph 3). The statement of policy should therefore disclose the conditions of performance, by an executive, for the entitlement of share option and long term incentive scheme along with the reasons for setting up such performance condition and the method used to assess the performance condition. If any executive fails meet the performance condition and does not benefit from the stock option grant or long term incentive scheme, the report should clearly state the conditions that are unsatisfactory. Details of the company on the basis of which the performance is measured should be provided in the report. Changes or amendments proposed to the existing terms and conditions for executives entitlement should be highlighted. Explanation should also provide for non-performance related remuneration and company policies on executives service contracts. This statement covers all directors from the end of the current financial year till the time when the report is put for voting by the shareholders of the company Performance graph – Publication of preceding 5 years performance graph should be included in the DRR showing the total shareholder return for holding shares whose listing transformed the company into a quoted company and for holding shares on the basis of which calculations are made for a broad equity market index. A fair method is used for the calculation of the total shareholder return along with various assumptions like the interest received on shares being reinvested (Companies Act, Schedule 7A, paragraph 4). Service Contract – During the relevant financial year if any executive is provided with a service contract, the date at which the service contract has been provided, its duration and its terms and conditions should be mentioned in the remuneration report. A detail of the termination compensation the executive is entitled to receive along with the companys liability on early termination is to be included (Companies Act, Schedule 7A, paragraph 5). On the complete preparation of the remuneration report, in the annual general body meeting it is introduced and called for a vote by the shareholders of the company (Section 241A Companies Act). This concept of voting the remuneration report was a controversial topic as many commentators suggested the voting to be limited to only the remuneration policy rather than the whole remuneration report. The reason they point out is that the executives remuneration policies are futuristic in nature so the shareholders can express their opinion on the policies adopted ra ther than making aware of the actual remuneration paid to each individual director. 4.1.2 Other Requirements: a) Along with the preparation of the DRR, disclosure of the aggregate compensation of the executive, loan given to the executives and other company transactions with the executive should be done in the notes of the annual accounts as mentioned in Schedule 6 of the Companies Act. b) As per Section 251 of the Companies Act and Companies Regulations (1995), listed companies in their summary financial statements should as a statement, state its policies regarding the remuneration of executives and the companys performance graph. 5 Stock/Share Options – Are they the Best in an Executive Compensation package? The most prominent and important component of executive compensation, in order to merge the interests of the executives with that of the interests of the shareholders, is providing the executives with stock options in the firms they serve (Jensen and Meckling, 1976). According to Jeffrey A. Williamson and Brian H. Kleiner, A stock option is a security that represents the right, but not the obligation, to buy or sell a specified amount of stocks at a specified price within a specified period of time. Stock options granted to executives of many large multinational firms are much higher in value than the annual cash pay they are entitled to be paid which in-turn boosts up the overall total compensation provided to the executives. This makes stock options the single largest ingredient in the current scenario of executive compensation. In the United States itself, stock options are held by more than 10 million employees (Simon R. and Dugan J., 2001) out of which around 160,000 of them tur ned out to be millionaires (Tate E.A. and Wilson T.E., 2001). Initially stock options were provided as a bonus to all the key executives of a company, but during the recent years its use is restricted only to the top level management. Providing stock options have resulted in increased productivity of the organisations. Executives are aware that their gain is linked with the stock performance of the organisation therefore they strive harder and work more efficiently to achieve progress. The main objective behind granting stock options is to make sure that executive make a profit on the success of the companys operations and in case of failures they suffer. Hence executive stock options link pay to performance. Critics argue to provide shares of stock rather than providing stock options in order to link pay and performance. The value of a stock option is only one third the value of a share, in case of companies having an average volatile stock price and yielding an average dividend the reason being stockholders receiving the whole value along with the dividend payment and the option holders benefitting only from the additional returns that is over and above the exercise price. This implies that options have a greater leverage and at the same cost, a company can provide its executives with options that are three times as much as that of shares. Stock options are incentive plans that are future