$9.93???" 11. 12. 13. 14. 15. 16. 17. Explain agency theory and how it relates to reward systems. Explain the difference between shares and share options. What are the arguments for reward systems at the executive level to contain a longer-term component? Discuss why an incentive package might include individual, divisional and corporate-level performance targets. Describe the advantages and disadvantages of equity rewards. How can target measures be used to promote either short-term or long-term performance? Describe agency costs and give several examples of them. What is the role of rewards and incentives for executives in reducing agency costs? The use of RPE systems for the evaluation of individual managers has been abandoned by many organisations. Microsoft is one example. Given this, can we conclude that RPE is no good? . Identify why RPE would be used at the company level. 'Executives should only be compensated based upon the achievement of targets. They should not receive a fixed salary component.' Discuss. Describe two disclosures required by the Corporations Act with respect to executive remuneration. Should a remuneration plan include a cash bonus or share options? Under which circumstances would either be appropriate? What are the advantages and disadvantages of having an individual's remuneration linked to performance outcomes? What role do the ASX Corporate Governance Council's Corporate governance principles and recommendations and the Corporations Act play in executive remuneration? Why would a company restrict when a senior executive can exercise their share options? Explain why boards ofdirectors will often employ independent remuneration consultants to assist in developing and assessing compensation plans