Dodd Frank Reform Executive Summary
Assignment 10-A
Executive Summary The Dodd-Frank reform is a financial reform passed by the Obama administration in 2010 as a respond to the financial crisis of 2008. The act has numerous provisions that are intended to decrease risks in the economy. The reform intended to decrease the risk in financial markets, provide transparency and accountability to executives, and allow stakeholders to have an opinion on executive compensation. Proponents of the law believe that it will help prevent a crisis like the one we faced in 2008 but critics believe that it will hinder economic growth. During this assignment will focus on questions regarding executive pay and the regulations placed by the Dodd-Frank reform.
Questions
1. Has Dodd-Frank succeeded …show more content…
Ira Kay and Steven Van Putten research argues that labor markers for executives are actually competitive, and that pay levels track corporate performance (Kay,Van Putten, 2010). I agree with the notion that executive pay is based on the salaries of others in the industry in a similar position.
I do not think that payment based solely on similar salaries in the industry is fair. I believe that executive pay should be based on experience and performance on an individual. The size and financial strength of the company should also be considered.
3. Have the clawbacks provisions in the Dodd-Frank law had an effect on executive pay? Since the clawback provision in the Dodd-Frank law was intended to make executives understand that there are financial consequences in their behavior (or lack of it) hurt their firm, liability insurance for this provision is now available. To what extent does insuring against clawback subvert the point of the law?
The clawback provision one that requires firms to recover pay received by executives if there are any material errors in the company’s financial statements or if they break any laws during in the job. This policy will increase the firm’s value by recapturing overpayments to executives and by adding financial security to the
Executive Summary The Dodd-Frank reform is a financial reform passed by the Obama administration in 2010 as a respond to the financial crisis of 2008. The act has numerous provisions that are intended to decrease risks in the economy. The reform intended to decrease the risk in financial markets, provide transparency and accountability to executives, and allow stakeholders to have an opinion on executive compensation. Proponents of the law believe that it will help prevent a crisis like the one we faced in 2008 but critics believe that it will hinder economic growth. During this assignment will focus on questions regarding executive pay and the regulations placed by the Dodd-Frank reform.
Questions
1. Has Dodd-Frank succeeded …show more content…
Ira Kay and Steven Van Putten research argues that labor markers for executives are actually competitive, and that pay levels track corporate performance (Kay,Van Putten, 2010). I agree with the notion that executive pay is based on the salaries of others in the industry in a similar position.
I do not think that payment based solely on similar salaries in the industry is fair. I believe that executive pay should be based on experience and performance on an individual. The size and financial strength of the company should also be considered.
3. Have the clawbacks provisions in the Dodd-Frank law had an effect on executive pay? Since the clawback provision in the Dodd-Frank law was intended to make executives understand that there are financial consequences in their behavior (or lack of it) hurt their firm, liability insurance for this provision is now available. To what extent does insuring against clawback subvert the point of the law?
The clawback provision one that requires firms to recover pay received by executives if there are any material errors in the company’s financial statements or if they break any laws during in the job. This policy will increase the firm’s value by recapturing overpayments to executives and by adding financial security to the