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Rewarding key personnel: Incentive programs in companies listed on the Stockholm Stock Exchange’s Large-cap list

Kinnander, Gustav and Lindholm, Eric (2009)
Department of Business Administration
Abstract
Purpose: The purpose of this thesis is to map the remuneration schemes to the top management and the board of directors in the companies listed on the Large-cap list at the Stockholm Stock Exchange as well as analyze if any trends in the design of incentive plans can be deduced. Methodology: A quantitative methodology has been used together with an abductive and descriptive approach. This has been carried out through a study of the annual reports and notifications to the AGMs of the companies listed on the Large-cap list at the Stockholm Stock Exchange. Theoretical perspectives: The thesis first explains the Agency theory in order to describe why incentive programs are a necessity in large corporations. Furthermore, a description of... (More)
Purpose: The purpose of this thesis is to map the remuneration schemes to the top management and the board of directors in the companies listed on the Large-cap list at the Stockholm Stock Exchange as well as analyze if any trends in the design of incentive plans can be deduced. Methodology: A quantitative methodology has been used together with an abductive and descriptive approach. This has been carried out through a study of the annual reports and notifications to the AGMs of the companies listed on the Large-cap list at the Stockholm Stock Exchange. Theoretical perspectives: The thesis first explains the Agency theory in order to describe why incentive programs are a necessity in large corporations. Furthermore, a description of different incentive programs, both short-term and long-term, is provided. Finally a brief overview of the relevant financial reporting framework is presented. Empirical foundation: The empirical foundation consisted of a study of the 2008 annual reports of all the concerned companies as well as the 2005 annual reports and notifications for the 2009 AGMs for a sample of companies selected for a comparative study. Conclusions: Incentive plans are common in the observed companies with over three quarters using some form of long-term incentive program. The most common types of incentive programs are share-based programs and option programs. There is also a connection between company size and the incentive programs used with share-based programs being somewhat more common in larger companies and option programs being slightly more common in smaller companies. No observable connection between industry belonging and use of incentive program have been found. Regarding fixed compensation there is a limited correlation between company size and the salary offered to CEOs and the board of directors. In addition salaries have increased quite substantially since 2005. During the last few years, the number of incentive programs in said companies appears to have increased. The proposed incentive programs for 2009 are nearly identical to the programs used in 2008. (Less)
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author
Kinnander, Gustav and Lindholm, Eric
supervisor
organization
year
type
H1 - Master's Degree (One Year)
subject
keywords
Management of enterprises, Board of Directors, Top Management, Share-based, Incentive programs, Remuneration, Företagsledning, management
language
Swedish
id
1437338
date added to LUP
2009-06-11 00:00:00
date last changed
2012-04-02 17:36:35
@misc{1437338,
  abstract     = {Purpose: The purpose of this thesis is to map the remuneration schemes to the top management and the board of directors in the companies listed on the Large-cap list at the Stockholm Stock Exchange as well as analyze if any trends in the design of incentive plans can be deduced. Methodology: A quantitative methodology has been used together with an abductive and descriptive approach. This has been carried out through a study of the annual reports and notifications to the AGMs of the companies listed on the Large-cap list at the Stockholm Stock Exchange. Theoretical perspectives: The thesis first explains the Agency theory in order to describe why incentive programs are a necessity in large corporations. Furthermore, a description of different incentive programs, both short-term and long-term, is provided. Finally a brief overview of the relevant financial reporting framework is presented. Empirical foundation: The empirical foundation consisted of a study of the 2008 annual reports of all the concerned companies as well as the 2005 annual reports and notifications for the 2009 AGMs for a sample of companies selected for a comparative study. Conclusions: Incentive plans are common in the observed companies with over three quarters using some form of long-term incentive program. The most common types of incentive programs are share-based programs and option programs. There is also a connection between company size and the incentive programs used with share-based programs being somewhat more common in larger companies and option programs being slightly more common in smaller companies. No observable connection between industry belonging and use of incentive program have been found. Regarding fixed compensation there is a limited correlation between company size and the salary offered to CEOs and the board of directors. In addition salaries have increased quite substantially since 2005. During the last few years, the number of incentive programs in said companies appears to have increased. The proposed incentive programs for 2009 are nearly identical to the programs used in 2008.},
  author       = {Kinnander, Gustav and Lindholm, Eric},
  keyword      = {Management of enterprises,Board of Directors,Top Management,Share-based,Incentive programs,Remuneration,Företagsledning,management},
  language     = {swe},
  note         = {Student Paper},
  title        = {Rewarding key personnel: Incentive programs in companies listed on the Stockholm Stock Exchange’s Large-cap list},
  year         = {2009},
}