Should the Meji Restoration be considered a revolution What were its Essay

Should the Meji Restoration be considered a revolution What were its consequences - Essay Example A number of reasons havce been put forward to justify that the Meiji Restorations was a revolution. Some of the justifications include the fact that the Meiji Restoration helped in ending the Tokugawa shogun while returning the Emperor to the Japanese central politics and culture. Law reports that the Meiji ‘revolution’ as some call it, also saw Japan change the way it relates with foreigners2. In this regard, he notes that after the restoration, Japan became more confident and home and ready to encounter the world for whatever cause. The restoration also helped in transforming Japan to a very powerful nation in the Asian continent both economically, politically and socially, all of which justifies that the Meiji Restoration was indeed a revolution. Law notes that, before the restoration of Japan, the Japanese people were under the control of the Tokugawa clan3. As a result, the Tokugawa clan control all the social, economic and political affairs of the country. However, it is reported that the Tokugawa rulers used to oppress the people of Japan, thereby denying Japan the opportunity of making any meaningful development. Therefore, with the emergence of Kurobune, Commodore Perry in the 1850s accompanied by other barbarians, a strong opposition to the Edo began in earnest4. Sonnu joi’s henchmen through the â€Å"Revere the emperor and repel the barbarians,† realized the inability of Shogun to remove the barbarians as a big opportunity to ‘restore’ the prominence of Kyoto once again according to Law5. Reports indicate that the most angered of all by the Shoguns were the ‘men of spirit’ or shishi as they are commonly referred to as in Japanese language. The shishi are said to be a segment of the samurai clan and are very aggressive in pursuing their objectives even it means using force. Law reveals that as the opposition was continuing to mount against the Tokugawa clan, another more opposition started to stir u p6. This time the Chosu, Satsuma and the han clans began mobilizing their troops for the war. This resulted in the emergence of a revolution slogan â€Å"Enrich the country, strengthen the army† of the young Toshimichi Okubo of the Satsuma clan7. It is reported this move is what culminated in the emergence of the Maiji era. Law reports that the opposition armies soon began to modernize towards the end of the Shogunate, a move that continued even after the Meiji. Intense war continued between the opposition forces and the Tokugawa clan that had been under the control of Japan. However, since the opposition forces were more organized and appeared to have superior weapons than Tokugawa, then soon managed to topple Tokugawa in a coup de tat on January 3 1868, marking the end of their rule8. It was immediately after toppling the Tokugawa clan from power that the opposition legitimized the â€Å"Revolution† but instead adopted the term â€Å"Meiji Restoration†9. In th is regard, the Meiji Restoration meant taking away rule from the Shogunate and taking it back to the Emperor, whose name was Meiji. Significance/Consequences of Meiji Restoration Meiji Restoration is highly regarded as a historical event that helped in transforming Japan to what it is today. In this regard, it has a lot of significance as far as the history the revolution of Japan is concerned. Firstly, the restoration leadership transformation from the Shogunate to the Emperor, which was remarkable as far as the history of Japan is concerned. This saw the rule change hand from the feudalist to a more democratic system of government for the people10. We are also told

If the gold standard was in use today, would it hinder economic growth Essay Example for Free

If the gold standard was in use today, would it hinder economic growth Essay The gold standard refers to a monetary system in which the unit of account of money will be fixed with the weight of gold. There are many people who argue that the gold standard should be implemented to bring down the inflation. By fixing the supply of money with gold, the government will not be able to issue money without having gold in reserve. However, on the other hand, there are experts who argue that by fixing the supply of money with gold, economic growth will be hindered as the amount of gold available on Earth is limited (Mises, 2009). This paper will show that the gold standard will hinder economic growth. I’ll firstly argue that there is a limited amount of gold in this world. Secondly, economic growth is seen as limited. Lastly, the amount of commerce will eventually reach a level equal to the gold holdings by the central bank of the country. Economic growth will be hindered if the gold standard is applied as there is a finite amount of gold in the world. Economic growth requires that there should be sufficient liquidity in the system. By adhering to the gold standard, economic growth will be hindered as to supply more money, the government will first need to buy gold. (Skousen, 1997) Secondly, economic growth is seen to be unlimited. This doesn’t complement with the gold standard, as the amount of gold is limited in the world. If economic growth is to be unlimited, then there must be enough money supply to finance it. The gold standard makes to difficult for governments to issue money, which in fact limits economic growth. (Cagan, 1982) Lastly, if the value of the dollar is limited by the amount of gold, then amount of commerce would reach a level equal to the gold holdings. In order for more money to be issued, the government would have to purchase more gold to back the increase in dollars issued. All the three points written above are influenced by the single factor that the supply is limited, while the demand for gold seems to be unlimited. (Cagan, 1982) Another problem with the gold standard is how to determine what weight of gold will equal to one unit of account. Furthermore, the gold standard can be suicidal for developing economies. Developing economies will need to buy gold to finance their economic growth, which might already be to expensive to buy for them. Currently, these economies are able to finance it through a budget deficit. Moreover, how will the gold standard be able to handle the speed and complexity of today’s financial transactions? Lastly, if the world shifts to a gold standard, then all the governments will need to burn huge amount of fiat money to make sure that the money supply equals to the amount of gold in the economy. Eichengreen Marc, 1997) In conclusion, I believe that although by adhering to the gold standard the level of inflation will come down. However, the economic growth of a country will be hinder. The major reason for this is the limited supply of gold. Furthermore, if the gold standard is implemented the prices of gold will shoot up, making it more difficult for developing economies to grow up. Last ly, the government will need to burn huge amounts of fiat money to make sure that the there is no extra money in the economy.

Commodity Fetishism in Edith Wharton’s The Age of Innocence :: Edith Wharton Age Innocence Essays

Commodity Fetishism in Edith Wharton’s The Age of Innocence Commodity fetishism is a term first coined by Karl Marx in his 1867 economic treatise, Das Kapital. It takes two words, one with a historically economic bent and another with a historically religious bent, and combines them to form a critical term describing post-industrial revolution, capitalist economies. Specifically, this term was used to describe the application of special powers or ideas to products that carried no such inherent value. In Edith Wharton’s The Age of Innocence, old New York society is dissected as if the book were a study in cultural anthropology. One of the critical elements of this society is its emphasis on material items. From Parisian dresses to brand name cigars, this society is particularly interested in what a member owns. A brief examination of how commodities affect the creation an identity and social order in Wharton’s New York will be endeavored. But first, commodity fetishism will be defined more specifically before we can apply Marx’s ideas to the novel. The comprising elements of this term will be examined to create a general understanding of the economic and social ideas that went into its creation. The term â€Å"commodity† is often considered to be synonymous with a â€Å"good,† any produced item, such as refined sugar or textiles (Spickard). Although this seems a decent, basic definition, a commodity actually refers to something useful that can be turned to commercial or other advantage. The key point here is that a good fails to be a commodity when it no longer has a commercial advantage. A pile of gold is only a commodity if someone agrees to buy it. The term â€Å"fetish†, despite the prevalent sexual connotations of today, actually has a religious origin. A fetish is any object that is believed to have special or magical powers, often associated with animistic or shamanistic religions. Thus, to make something a fetish is to infuse an inanimate or material object with special powers above and beyond that of its physical self. The concept of commodity fetishism, then, was used by Marx to describe the over-appraisal of commodities in a capitalist economy. What is Marx saying? How can something be â€Å"worth† more than it’s worth? This occurs when the â€Å"use value,† the natural capacity to satisfy a human want, of something is of different worth than its â€Å"exchange value,† the social capacity to be exchangeable for other commodities (Wenning).

Do People Have the Right to Die? Essay -- Euthanasia, Argumentative Ess

A disabled man shares his personal experience with euthanasia: As a quadriplegic who has been paralyzed from the chest down for over 24 years, I want to address the dangerous potential ramifications of legalizing physician assisted suicide (PAS) from a viewpoint of personal experience. The past danger I am referring to concerns the time when I was first paralyzed. My paralysis is the result of a broken neck and spinal cord injury from a car accident in 1975. Add to this cheery scenario the fact that I was soon greeted by a doctor who told me I was not supposed to have lived as long as I had, would most likely die shortly, or, in the best case would spend the remainder of my life confined to a wheelchair and you know I was not in the best of moods. After I surprised the doctors and lived to get into rehab, they told me, at that time, the average lifespan of a male quadriplegic was 36 years. By then, I would probably die from a pressure sore, kidney failure, or other related complication. That meant my best hope was 15 more years paralyzed. I'm 45 now and can look back on that laughingly. It wasn't so funny then. I spent 6 weeks getting medically stable followed by 4 and a half months in rehabilitation. During that period, there were MANY times when I didn't know if I wanted to go on. What have I done since the accident? I have lived semi-independently for nearly 23 years. In 1985, I graduated the University of Southern Maine with a B.A. in Communication. In 1989, I graduated Regent University in Virginia Beach with an M.A. in Creative Writing/Journalism. While there, I also worked with a large non-profit organization, received an outstanding service award for working 5 years in an inner city project, wrote and sold 2 radio... ...a's Family Doctor. Random House:1991. http://www.euthanasia.com/koop.html. (27 Sept 2003). Lewis, Trixie. "Dying with Dignity." Positive Living. 2003: p.1-2. Online. Internet. http://www.alpha.org/apla/positiveliving/1199/letters.html. (28 Sept 2003). Lykes, Fred. "A Defense of Physican Assisted Suicide(PAS)." p. 1-10. http://www.bluesky7.com/. (27 Sept 2003). Saunders, Peter. "Twelve Reasons Why Euthanasia Should Not Be Legalized." Christian Medical Fellowship. 1997: p. 1-6. http://www.cmf.org.uk/ethics/twelve.htm. (28 Sept 2003). Singer, Peter. "Freedom and the Right to Die." Online Opinion. 2002: p.1-3. Online. Internet. http://www.onlineopinion.com.au/2002/May02/Singer.htm. (28 Sept 2003). Smith, Wesley. "We Ignore the Dutch Legalization of Euthanasia at Our Own Peril." 17 Dec 2000: p. 1-3. http://www.euthanasua.com/nethcases.html. (27 Sept 2003). Do People Have the Right to Die? Essay -- Euthanasia, Argumentative Ess A disabled man shares his personal experience with euthanasia: As a quadriplegic who has been paralyzed from the chest down for over 24 years, I want to address the dangerous potential ramifications of legalizing physician assisted suicide (PAS) from a viewpoint of personal experience. The past danger I am referring to concerns the time when I was first paralyzed. My paralysis is the result of a broken neck and spinal cord injury from a car accident in 1975. Add to this cheery scenario the fact that I was soon greeted by a doctor who told me I was not supposed to have lived as long as I had, would most likely die shortly, or, in the best case would spend the remainder of my life confined to a wheelchair and you know I was not in the best of moods. After I surprised the doctors and lived to get into rehab, they told me, at that time, the average lifespan of a male quadriplegic was 36 years. By then, I would probably die from a pressure sore, kidney failure, or other related complication. That meant my best hope was 15 more years paralyzed. I'm 45 now and can look back on that laughingly. It wasn't so funny then. I spent 6 weeks getting medically stable followed by 4 and a half months in rehabilitation. During that period, there were MANY times when I didn't know if I wanted to go on. What have I done since the accident? I have lived semi-independently for nearly 23 years. In 1985, I graduated the University of Southern Maine with a B.A. in Communication. In 1989, I graduated Regent University in Virginia Beach with an M.A. in Creative Writing/Journalism. While there, I also worked with a large non-profit organization, received an outstanding service award for working 5 years in an inner city project, wrote and sold 2 radio... ...a's Family Doctor. Random House:1991. http://www.euthanasia.com/koop.html. (27 Sept 2003). Lewis, Trixie. "Dying with Dignity." Positive Living. 2003: p.1-2. Online. Internet. http://www.alpha.org/apla/positiveliving/1199/letters.html. (28 Sept 2003). Lykes, Fred. "A Defense of Physican Assisted Suicide(PAS)." p. 1-10. http://www.bluesky7.com/. (27 Sept 2003). Saunders, Peter. "Twelve Reasons Why Euthanasia Should Not Be Legalized." Christian Medical Fellowship. 1997: p. 1-6. http://www.cmf.org.uk/ethics/twelve.htm. (28 Sept 2003). Singer, Peter. "Freedom and the Right to Die." Online Opinion. 2002: p.1-3. Online. Internet. http://www.onlineopinion.com.au/2002/May02/Singer.htm. (28 Sept 2003). Smith, Wesley. "We Ignore the Dutch Legalization of Euthanasia at Our Own Peril." 17 Dec 2000: p. 1-3. http://www.euthanasua.com/nethcases.html. (27 Sept 2003).

Internet Piracy Essay

Abstract Internet Piracy has drastically affected the music and film industry and by downloading illegally on the Internet, millions of Internet users swap billions of dollars worth of music and movies. With all the sharing of copyrighted materials, the music and film industry is losing millions of dollars. This research looks into the effects of Internet Piracy and current campaigns to deter it. The study shows the effectiveness of existing campaigns and the relationship between the decline of the music and film industry and the rise of Internet Piracy. Exploring the good and bad of campaigns and using the information to propose a documentary to approach the problem. Raising awareness and educate Internet users about Internet Piracy and try to have the numbers under control. 1. Introduction â€Å"Fighting against Internet piracy and infringement is a long-term mission and an uphill journey.† – Yan Xiao Hong, Deputy Director, National Copyright Administration of China (quoted in AFP 2006) The exchange of information is nothing new. Technologies change, cultures change, and people change, but in any point of human history there are people that copy and distribute the work of others in any form. Technologies that help the production and distribution of information heavily influenced the shape of history, especially when it is accessible to larger population of people. From prints to recordable medias, every technology advances us nearer to today’s digital file sharing. Today, Internet pirates operate online stealing billions of dollars worth of digital content every year (Fisk, 2009). By downloading illegally on the Internet, millions of users turned into pirates swapping billions of dollars worth of music and movies and other intellectual property that can be converted to digital format. With all the sharing of copyrighted materials, the music and film industry is losing millions of dollars (Fisk, 2009). Thus, Internet Piracy has drastically affected the music and film industry and Internet users need to be educated via a documentary on how to combat piracy in Singapore. 2. Findings & Analysis 2.1 Background According to a trusted Internet survey, a staggering 70% of Internet users think there is nothing wrong with online piracy (Go-Globe, 2011). In the context of the U.S economy alone, there is $12.5 billion dollars in losses, more than 70,000 lost jobs, and $2 billion in lost wages thus far – Internet Piracy being the main cause. (Siwek, 2007). The niggling issue regarding Internet Piracy is severe. However, after decades and numerous efforts to stop it, the results of the actions taken by the entertainment and other industries have been futile, having no impact in reducing piracy amongst users. On the contrary, the rate of Internet Piracy has increased significantly in recent years, and the figure will only continue its growth (Cones, 2010). 2.2 Survey Through a survey put up by me, the results gathered were not surprising. Eighty-four percent of the online users surveyed have downloaded media in the past month but sixty-two percent do not mind paying for these media. When asked if they know the consequences of downloading copyrighted contents, seventy-three percent knew of the consequences but fifty-four are not afraid of getting caught. This has further cemented the proof that the existing anti-piracy campaigns are not working. Although only thirty-five percent of interviewees are interested in taking part to combat Internet piracy, a slight increment of fourteen percent wants to be educated about piracy and fifty-four percent will watch documentaries about it. 2.3 Existing Campaigns With this established, it is needless to say that existing anti-piracy campaigns and action taken thus far have had little to no effect. An example is of companies taking the issue to court. There are two types of copyright infringement, civil and criminal and in both cases the users must be identified and evidence must be gathered before putting them into the arms of the law. In civil cases, copyright holders handle the process. In criminal cases, law enforcement units utilize different tools and techniques with variable reliability to gather evidence, often causing defragmentation in its accuracy. An example of one such unfortunate incident is the widely publicized lawsuit brought up by the RIAA against a deceased 83-year-old woman. She was accused of sharing over 700 songs under the username â€Å"smittenedkitten†. The case was later dropped by the RIAA after it was confirmed that the woman had never even owned a computer (Fisk, 2011). Another movement to deter piracy was the introduction of the Digital Rights Management (DRM). This technology makes it difficult for users to make copies of content. DMCA also legally protects DRM, making it a criminal offense to remove DRM protection. At present, most media contains some form of DRM (Fisk, 2011). Most DRM schemes, however, only provide protection temporarily. The protection can still be easily cracked by professional pirates and made widely available. One popular movement most Internet users have occurred is the presence of a short video about piracy at the start of movies in cinemas and retail DVDs and VCDs. However, such a movement is to a degree, arbitrary, as the video’s primary target audience is piracy supporters. Ironically, this has, instead of deterring piracy, led to users turning to it in search for more ‘freedom’. The same content could be available online- and without the presence of irritating advertisements that â€Å"block† the movie itself. 2.4 Piracy Campaigns Guerilla campaigning has been more successful amongst the campaigns. In August 21, 2006, an organization dubbed â€Å"The League of Noble Peers† released a documentary in support of Internet Piracy. The documentary â€Å"Steal This Film† was distributed freely on ‘BitTorrent’, a software frequented by Internet pirates to share copyrighted content. The film received wide positive reviews and was screened across film festivals from all around the world (King, 2008). The campaign against Anti-Piracy is much more successful mainly because the pro-piracy organizations made use of the much hated force feeding methods deployed by copyright holders and make it to their benefits. Although misleading and being one-sided, the film is extremely effective and hence, manages to spur a movement against Anti-Piracy – The copyright holder’s plan backfired. 2.5 Good Campaigns The first step to making a good campaign is to study what works and what do not. In this case it is quite obvious that the methods used by the â€Å"The league of Noble Peers† work and the copyright holders methods are not working. Hence, the best way to educate Internet users and combat piracy is to create an effective and different documentary and distribute it for free online. The documentary â€Å"The Cove† is a good example of an effective and good documentary. By challenging the question head on with exclusive footage shot in a unique perspective, it managed to become one of the best and most influential documentaries that caused a movement with the intended and desired effect. A ninety-four percent positive rating from both Rotten Tomatoes and IMDB.com proved the huge positive reception for the documentary (Rotten Tomatoes Various Authors, 2009). Thus the model of a good documentary is effective at spreading information and educates people. 3. Conclusion Internet Piracy, despite years of effort to deter it, the existing campaigns’ messages are not strong or effective enough to keep Internet Piracy at bay. Therefore, after studying the good and bad of these existing campaigns, a necessary solution has to be done to control the situation. Thus, after knowing the proven effect of a documentary, there is a need for a good documentary to educate online users about Internet Piracy to have the numbers within control. From the above analysis, making a documentary is one of the best options to try and deter the increase in Internet Piracy. With the documentary, more people will be aware of the issue and understand what the industry is going through with Internet Piracy currently affecting the market. Hence with the proposed documentary, results will be highly positive and have the number of Internet Piracy under control. 4. Recommendations The documentary will be shot as an investigative documentary and the approach will not be a traditional documentary but a new approach similar to â€Å"The Cove†. The documentary will take viewers through the insights of local music and film industry, to introduce the hard work behind the contents they produced over the years. The film will gradually take a stand against Internet Piracy by showing the negativity, cause and effects to the economy due to illegal file sharing over the years. The showing of such effects includes some potential creative firms closing down due to the decline in sales because of the act of downloading illegally. The documentary will take a turn in mood and attempts to go behind the scene to track down Internet pirates and following authorities to prosecute them. The documentary will end off with local musicians and filmmakers having their say against Internet Piracy. The film will be distributed for free over the Internet via torrent, streaming sites and file-sharing forums and hopefully on free-to-air television networks to increase exposure for the film. References Cones, J. (2010). Business plans for filmmakers. Southern Illinois University Press. Fisk, N. (2011). Digital piracy. New York: Chelsea House. Fisk, N. (2009). Understanding online piracy: The truth about illegal file sharing. Santa Barbara, CA: ABC-CLIO. Go-Globe. (2011, November 01). Online piracy. Retrieved from http://www.go-gulf.com/blog/online-piracy King, J. (January 3, 2008). The Future Doesn’t Care About The Bank Balance but the 1/1000 do!. Retrieved from http://www.jamie.com/2008/01/03/the-future-doesnt-care-about-your-bank-balance-but-the-11000-do/ Rotten Tomatoes Various Authors. (2009). The cove. Retrieved from http://www.rottentomatoes.com/m/1208882-cove/ Siwek, S. (2007, August 21).The true cost of sound recording piracy to the US economy. Retrieved from http://www.ipi.org/ipi_issues/detail/the-true-cost-of-sound-recording-piracy-to-the-us-economy

Podiatrist essays

Podiatrist essays Podiatrist The job I picked is a podiatrist (foot doctor). Education/training requirements You need at least 3 years of college, and most applicants have a bachelors degree. In colleges of podiatry students take a 4-year program leading to the degree of doctor of podiatric medicine (D.M.P.). All states require that podiatrists be licensed. Getting the job Most podiatrists go into private practice. Some newly licensed podiatrists start their own businesses. Others start by working as assistants in the offices of established podiatrists. Others take salaried jobs until they have enough experience to open their own business. Working conditions Podiatrists generally set their own working conditions. Most work about 40 hours a week, often including some evenings and Saturday hours. Schedules are flexible, and some podiatrists work part-time. Podiatrists need good vision and steady nerves. They must work well with their hands. They must have an aptitude for scientific and technical activities. They should have good business sense and the ability to deal with all kinds of people. Requirements A high school student should take as many courses in biology, zoology, in organic and organic chemistry, and as much physics and math as possible to determine an interest in this field. The profession requires a scientific mind, a good business sense, and an ability to put patients at ease. Employment Opportunities Podiatrists held about 14,000 jobs in 1998. Most podiatrists are solo in business, although more are entering partnership practices. Others are employed in hospitals, nursing homes, the U.S. Public Health Service, and the Department o ...

Free Essays on Hussein

Saddam Hussein took his position as the Head of State of Iraq on July 11th, 1979 after the people had voted to relieve his predecessor, Ahmad Hasan Bakr, due to health reasons. Before he became the Supreme Ruler of Iraq, he held many seats and offices to include Chairman of the Revolutionary Command Council, Secretary General of the Ba’th Party Regional Command, Prime Minister and Commander-in-Chief of the Armed Forces (Karsh 110). With all of these positions that he had held at some point in time, it was no wonder that his popularity was wide spread, but unfortunately, his views and beliefs in which he expected to make known were not. As stated earlier, Hussein’s involvement in the Ba’th Party is no mystery. However, contrary to popular belief, he did not in fact start it. Two Syrian schoolteachers from Damascus established the Ba’th Party in the early 1940’s. Its ideology and agenda is the rise and unification of the Arab world, and to elimi nate the traces of colonialism in the Middle East (Karsh 12). The Ba’th Party was secretly established in Iraq by 1950, but did not take control until 1963. This lasted only until a Prime Minister who was not involved in the Ba’th beliefs took office in 1963. Due to the part of high elected political officials and senior military officers, the Ba’th Party once again gained full control over Iraq in 1968 and remained that way until March-April of 2003 where the Ba’th Part and it’s political leadership was destroyed by U- led coalition forces (Orient).... Free Essays on Hussein Free Essays on Hussein Saddam Hussein took his position as the Head of State of Iraq on July 11th, 1979 after the people had voted to relieve his predecessor, Ahmad Hasan Bakr, due to health reasons. Before he became the Supreme Ruler of Iraq, he held many seats and offices to include Chairman of the Revolutionary Command Council, Secretary General of the Ba’th Party Regional Command, Prime Minister and Commander-in-Chief of the Armed Forces (Karsh 110). With all of these positions that he had held at some point in time, it was no wonder that his popularity was wide spread, but unfortunately, his views and beliefs in which he expected to make known were not. As stated earlier, Hussein’s involvement in the Ba’th Party is no mystery. However, contrary to popular belief, he did not in fact start it. Two Syrian schoolteachers from Damascus established the Ba’th Party in the early 1940’s. Its ideology and agenda is the rise and unification of the Arab world, and to elimi nate the traces of colonialism in the Middle East (Karsh 12). The Ba’th Party was secretly established in Iraq by 1950, but did not take control until 1963. This lasted only until a Prime Minister who was not involved in the Ba’th beliefs took office in 1963. Due to the part of high elected political officials and senior military officers, the Ba’th Party once again gained full control over Iraq in 1968 and remained that way until March-April of 2003 where the Ba’th Part and it’s political leadership was destroyed by U- led coalition forces (Orient)....

Book Title Ideas 6 Actionable Steps to Choose a Book Title That SELLS

Book Title Ideas 6 Actionable Steps to Choose a Book Title That SELLS Book Title Ideas: How to Choose the Perfect Title for Your Book I get how frustrating it can be.Writing the book might seem like the most difficult partand then you have to actuallytitle the darn thing!When it comes to writing a book,coming up with reasonable book title ideas is surprisingly one of the hardest parts to complete. It’s difficult because titles are essentially short hooks that advertise your book using the fewest words possible.It’s also what readers look for first whenthey discover new books, and can take less than 5 seconds to make a decision.This is why it’s so crucial to craft a perfect name. Heres how to come up with book title ideas:Write down the problem youre solvingCreate a subtitle to clarifyMake it memorableMake sure its genre-appropriateCreate it to stir intrigueInclude your character in the titleTo help spur your creative process, we’ve created a few essential guidelines for you to follow as you craft the perfect book title ideas for your masterpiece.Since there are different title considerat ions for fiction and non-fiction, we broke these two topics down separately into:How to Choose a Book Title for Non-FictionHow to Choose a Book Title for FictionLet’s create your selling title!NOTE: We cover everything in this blog post and much more about the writing, marketing, and publishing process in our VIP Self-Publishing Program. Learn more about it hereHow to Choose a Book Title for Non-FictionAs you begin crafting your book title ideas for your non-fiction book,the key is knowing that non-fiction readers are looking for solutions.Whether it’s losing weight, becoming a master in sales, or becoming better at fostering relationships, they’re simply looking for a book that will solve their problem. To leverage this idea, here are a set of rules to consider:#1 Your Title Must Include a Solution to a ProblemYour title should be crystal clear on what your readers will achieve by reading your book. Experts say that a title with a clear promise or a guarantee of results will further intrigue your readers.Here are some questions to consider when creating your title:Are you teaching a desirable skill?Can your personal discoveries impact someone’s life?Can your book solve a very difficult problem?Here are our favorite book titles that offer a clear solution to a problem with promising results:Asperger’s Rules!How to Make Sense of School and Friendshipby Blythe GrossmanHow Not to Die: Discover the Foods Scientifically Proven to Prevent and Reverse Diseaseby Michael GregerThe 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Richby Tim FerrissBook Title Ideas Action Plan:Write down the best solutions or teachings your book offers and form these into potential book title ideas.#2 Use a Subtitle for ClarityA great non-fiction title employs a subtitle to clarify what the desired outcome will be from reading yourbook.In this video clip, Chandler explainsin 5 simple steps how to create a compelling subtitle:Here are some questions to consider when creating your subtitle:How can your subtitle further expand on achieving a desirable outcome?What are the biggest pain points that yoursubtitle can provide a solution for?How can you further address your innovative solution in the subtitle?Here are our favorite book subtitles that spell out what their readers can expect from reading their books:The Crossroads of Should and Must:Find and Follow Your Passionby Elle LunaBetter Than Before: Mastering the Habits of Our Everyday Livesby Gretchen RubinWork Rules! Insights from Inside Google That Will Transform How You Live and Leadby Laszlo BockBook Title Ideas Action Plan:Make a list of 10 attention-grabbing subtitles that promise big outcomes and other positive benefits.#3 Make Your Title UnforgettableCatchy titles are memorable, boring titles are not. So make an effort to be more creative and fun with your book title! Use alliterationsto make your title easier to read and remember. A memorable and light-heart ed title adds additional character to your book and is also a great way to attract readers.Here are some questions to consider when creating your memorabletitle:Will a fun title turn a normally boring subject into something more interesting?Will adding humor to your title further entice readers?Will a cleverly written title stand out from other books in this genre?Here are our favorite books that engaged us with clever titlesand subtitles:Me Talk Pretty One Dayand Let’s Explore Diabetes With Owlsby David SedarisTrust me, I’m Lying: Confessions of a Media Manipulatorby Ryan HolidayFreakonomics: A Rogue Economist Explores the Hidden Side of Everythingby Steven D. LevittBook Title Ideas Action Plan:Experiment with different types of styles and poll your audience to determine whether a comedic, shocking, or even bizarre title will be the most appealing to your target audience.No matter which method works best on creating a compelling title for nonfiction books, a good thin g to remember is to always test multiple titles with different audiences to determine which book title generates the biggest response.Getting good feedback is the only way to know for certain which title is perfect for your book.How to Generate Book Title Ideas for FictionGenerally, fiction titles are allowed more creative wiggle room than their non-fiction counterparts. That being said, an effective fiction title must still pique your readers’ attention. And while it’s true that you can title your fictional book with random names, it still mustcatch the reader’s attention.Here are some key guidelines to keep in mind:#1 Your Title Should be Appropriate to Your GenreYour novel title should use language that resonates with both your genre and target audience. For example, a romantic book can call for dreamy language whereas an action book can warrant strong and powerful words.This means that you mustknow your books genre and words that best fit the style of title .Here are some questions to consider for appropriate genre titles:What genre best fits this story?Which are the perfect choice words for your genre?Here are our favorite fictional titles based on genre:Ready Player Oneby Ernest ClineThe Great Gatsbyby F. Scott FitzgeraldThe Godfatherby Mario PuzoBook Title Ideas Action Plan:Based on the genre of your book, pick out a few keywords that best suit its category and evoke strong emotions in your readers.#2 Your Book Title Should Pique YourReader’s InterestA great fiction title teases and leaves your audience wanting more. You want your audience to read your title and think, â€Å"I must read what’s behind that great book cover!†Create fictional titles intriguing enough tocapturethe imaginations of your readers, and get to them to read your story.Here are some questions to consider on how to pique interest with your title:Which key components of your story best captivatesyour readers?What emotions do you want your re aders to have once they read your title?Here are our favorite fictional titles that drew our attention:Fahrenheit 451by Ray BradburyThe Da Vinci Codeby Dan BrownFear and Loathing in Las Vegasby Hunter S. ThompsonBook Title Ideas Action Plan:Choose a theme that will best draw your reader’s attention. Come up with 5 titles that will catch your reader’s attention and pique their curiosity.#3 Look to Your Characters for Book Title InspirationA great book title captures the spirit of the protagonist. Some authors simply use the hero’s name for their  title.Others have combined the names of their hero along with their special qualities to inform the audience about their protagonist’s accomplishments like Charlotte’s Web by E.B. White.On the flip-side, a formidable antagonist can also be an amazing book title.Asinister name can convey a sense of dread and expectation for what’s to come like Doctor Sleep by Stephen King. Both choices are great ti tle ideas and should be seriously considered for your fictional book.Here are some questions to consider when including a character as a title:Between the hero and villain, who impacts the story more?Are there any stunning qualities from your characters that will draw a reader’s emotion?Can the plot of the story be summed up as a title?Here are our favorite fictional books that use characters for its title:Harry Potter(Literary Series) by J. K. RowlingBridget Jones’ Diaryby Helen FieldingEnder’s Gameby Orson Scott CardBook Title Ideas Action Plan:Determine which character best conveys what the story will tell in your title. You may also include creative words or themes to further showcase the character’s unique qualities or the journey itself.Your Next StepsUltimately, the title of your book depends on you, the author. By following these constructive guidelines, you will be able togenerate a number of book title ideas you can use to find the perfect one t hat grasps the attention of readers and soon become an Amazon bestseller in no time!#1 Join your FREE training!This training was created just for you. Make sure to save your spot and sign up right now so you can learn exactly what it takes to write and publishyour book within 90 daysor even less!You wont find this guide anywhere else. Take advantage of this offer so you can spark multiple book title ideas in as little as an hour!

Marketing Plan Project Research Proposal Example | Topics and Well Written Essays - 2500 words

Marketing Plan Project - Research Proposal Example There is a huge need for this kind of product among the people. The following study will provide some information and will develop a marketing plan for this developed product. Economic Environment and Competitive Environment Analysis US are one of the strongest, leading and developed economies in the world. The recent global recession in the year 2007-08 and the European financial crisis in the year2008-09 have affected the economic situation of the country. Most importantly, this economic downturn has affected the social and economic life cycle of a country. The per capita income of people has gone down due to this recession. Moreover, this unfavorable economic situation of the country has impacted negatively on the economic growth of the country. Currently, it is feasible that, the disposable income of people has gone down comparing to the pre era of global recession. Now-a-days, people are trying to save more rather than consuming. Several economic policies such as high tax rate, limited government expenditure has affected the economic situation of the country very badly. Looking into these factors, it can be said that, the country is still suffering from the impact of economic downturn. In terms of competitive environment, the success of the product depends upon the product attribute, price range of the products and existing rivalry in the operating market place. Depending upon these things, it can be said that, the product has several competitive advantages. First of all, this type of business market is still uncovered and untapped. Therefore, there is a huge opportunity for the brand to capitalize on the potential market opportunity. On the other hand, it can be said that, this kind of product will be very effective in the daily life of people. In terms of pricing, it can be said that, this product is affordable for the people of all kind of income group, such as lower middle, middle, upper middle and upper class. The low price range of the products is ad dressing that; people can afford this product without any hesitation. Lastly, in terms of competitors, it can be said that lack of competitors and due to untapped market the product can achieve huge competitive advantage and market share. It will help them to increase the target customer base. Data on the Market The organization can target a huge area of market place, as it is discussed earlier that, the specific market segment is still untapped. Moreover, according to a survey, it has been found out that, more than 75% people, including all kind of market segment it is feasible that, there has been already a need for this product. According to the respondents, it is feasible that, major of them are unhappy as they could not able to use 100% of a beauty cosmetic product or a tooth paste. Therefore, it has evidenced that, there are huge demand for the product. In terms of age it is feasible that, there is a need for the product among the people aged between 12 and 65. Moreover, in te rms of income group, it has been feasible that, people whose household income is more than 15,000 US dollar are the major target group of this product. In terms of gender of people, the products are seemed to be popular among the household female respondents comparing to other male respondents. The median income of the maximum

The Art of Film Paper 1 Essay Example | Topics and Well Written Essays - 250 words

The Art of Film Paper 1 - Essay Example From the events of the story, we learn that people can go to all lengths to seek revenge and in the quest of seeking revenge; many innocent people may incur injury.1 Yes, they have. In the issue of the characters suffering from amnesia, it portrayed the measures the characters took to contain information. An example is Leonard tattooing information on his body to remember every incident. Yes, it does. The beginning clearly depicts the events of death that made the lead actor Leonard transform from being a detective to being a murderer. At the end of the movie, it is clearly shown how Leonard was out to kill Teddy, while the movie started with a dead body. Not all narrative lines achieve closure. In the instance of the murder of Teddy, one is not sure if the murder took place. Leonard has amnesia. One does not know if he remembered Teddy’s face and came back kill him. It is not known, if Teddy remembered the person that killed his wife or if he avenged the death of his wife. 6a). How does the narration present story information to us? Is it restricted to one or a few characters’ knowledge, or does it range freely among the characters in different spaces? The story concentrates on one person, Leonard. The whole story is about him and his quest for

The British Economy Essay Example | Topics and Well Written Essays - 1500 words - 4

The British Economy - Essay Example Within 1940th – 1970th absolute majority of former British colonies became independent; thus, economic influence of the British Isles within the Commonwealth decreased. Owing to inconsequent regulation in the previous years in 1968 Wilson’s government had to transfer national budget in the economy regime. Besides, in 1967 unprofitable steel industry was nationalized for stabilization of the whole industrial sector. Economic and industrial spheres required urgent restructure. The period of 1970th was marked with high level of socio-economic instability. Pressure of national trade unions increased as a result of limitations of their rights and growing unemployment. Numerous strikes of workers caused million losses. In 1969 trade unions rejected limitation of right for strikes. There was a large disproportion between number of trade unions and employed workers. The majority of labor force in the manufacturing sector was employed at the big plants and enterprises. â€Å"Thus in 1973 establishments with 1000 or more employees employed 42 per cent of the manufacturing labour force and even in 1984, after a wave of closures of large plants, still employed 32 per cent.† (Oulton 1990, 72) Economic recession covered the whole manufacturing sphere, including employment rate, workers’ socio-economic welfare, basic economic indices (GDP, IRR). British citizens regarded a long-term crisis as consequence of entry into EU (1973 – 1975), political i nstability, inappropriate financing of industrial sector. Despite of economic growth of 1980th, share of manufacturing sector in GDP had decreased from 25% up to 14% in 2004. Decrease of manufacturing sector happened mainly due to the reorganization of national economy and growth of service sector. Since early 1980th its output has increased by circa 30%. The same tendency is marked in other countries Such tendency is conditioned with a large-scale closing of large plants and

Marketing Plan of John Lewis Research Paper Example | Topics and Well Written Essays - 3500 words

Marketing Plan of John Lewis - Research Paper Example This essay describes marketing scenario as ever changing and with changes come unprecedented challenges, the retailer companies are facing several challenges and the need of the hour is to come up with new marketing plans which are capable of tackling these never seen before challenges. John Lewis is one of the biggest departmental stores in UK; it was founded by John Spedan Lewis. John Lewis had to enter into a partnership to compete against the other biggies like Tesco in the UK. â€Å"The John Lewis Partnership's 76,500 Partners own the leading UK retail businesses - John Lewis and Waitrose. Our founder's vision of a successful business powered by its people and its principles defines our unique company today. The profits and benefits created by our success are shared by all our Partners.† (John Lewis). John Lewis is one of the biggest players in the market only behind Tesco, Wal-Mart and France’s Carrefour. It is the fourth major player should its revenue be conside red, it is in the top five for sure should profitability be considered. John Lewis is a much diversified organization, it is doing quite well. The company operates in televisions, travelling, electrical so on and so forth. It is fair to say that John Lewis has been doing well into its divided segments but the need of the hour is to have a competitive marketing plan in place which would further improve the profits and compete against the likes of Tesco, Wal-Mart and France’s Carrefour.... It is the fourth major player should its revenue be considered, it is in the top five for sure should profitability be considered. John Lewis is a much diversified organization, it is doing quite well. The company operates in televisions, travelling, electrical so on and so forth. It is fair to say that John Lewis has been doing well into its divided segments but the need of the hour is to have a competitive marketing plan in place which would further improve the profits and compete against the likes of Tesco, Wal-Mart and France’s Carrefour. Marketing plan for the organization is as follows: Market Demographics One of the most crucial parts of a marketing plan is situational analysis; important factors like SWOT analysis, organizational strategies, marketing effectiveness, and customers are discussed under situational analysis. It is ideal to apply the FEPOS approach under situational analysis, FEPOS approach will shed light upon functions, environment, productivity, systems, organizations and lastly strategy will be discussed. Functions: Operating in diverse areas that are profitable for the company is very useful, for instance more and more people are opting to buy LCD and LED TVs, John Lewis sells these HD TVs in its store as well as online, this is very helpful and should be continued in the future. Electronic goods are also sold by the company which is again really good. Consumer electronics is in demand these days, the disposable income in the hands of the people has increased and as a result of which they have started buying electronic goods, this is a wonderful opportunity for John Lewis to capitalize upon. Environment: The environment is

Acute chest sydrome Research Paper Example | Topics and Well Written Essays - 1500 words

Acute chest sydrome - Research Paper Example Basically, the illness is defined as follows: â€Å"ACS is the term used to describe a new pulmonary infiltrate with respiratory findings in a person with sickle cell disease.† (Miller, 2011). The causes of Acute Chest Syndrome have been found to be both infectious and noninfectious. Thus causing its treatment modalities to be different and not typical when compared to the treatment of other pulmonary illnesses that might be found in non Sickle Cell patients. Hence the unique nature of Acute Chest Syndrome as a stand alone illness or as part of the Sickle Cell complications. â€Å"2504 febrile events in 466 children with SCD resulted in 466 of the infants acquiring ACS. The incidence of ACS cumulatively decreased over time from 27.0% to 17.4% among febrile children with SCD (P More commonly seen as a complication among children suffering from CSD, ACS has proven to have a peak incidence among children between 2-4 of age, which accounts for 25.3 per 100 patients years among children with hemoglobin SS. The epidemiology of the illness also offers evidence that among patients with SCD; â€Å"ACS is the second most common cause of hospitalization (second to vasoocclusive pain) with a reported rate of 12.8 hospitalizations per 100 patient years. It is the most common cause of death, with one-fourth of SCD-related deaths due to ACS. In a report from the CSSCD, the death rate in patients with ACS is 1.8 percent in children and 4.3 percent in adults.†(Uptodate.com, 2014) Among hospitalized patients with SCD, almost half of those confined can be

Marketing Plan of John Lewis Research Paper Example | Topics and Well Written Essays - 3500 words

Marketing Plan of John Lewis - Research Paper Example This essay describes marketing scenario as ever changing and with changes come unprecedented challenges, the retailer companies are facing several challenges and the need of the hour is to come up with new marketing plans which are capable of tackling these never seen before challenges. John Lewis is one of the biggest departmental stores in UK; it was founded by John Spedan Lewis. John Lewis had to enter into a partnership to compete against the other biggies like Tesco in the UK. â€Å"The John Lewis Partnership's 76,500 Partners own the leading UK retail businesses - John Lewis and Waitrose. Our founder's vision of a successful business powered by its people and its principles defines our unique company today. The profits and benefits created by our success are shared by all our Partners.† (John Lewis). John Lewis is one of the biggest players in the market only behind Tesco, Wal-Mart and France’s Carrefour. It is the fourth major player should its revenue be conside red, it is in the top five for sure should profitability be considered. John Lewis is a much diversified organization, it is doing quite well. The company operates in televisions, travelling, electrical so on and so forth. It is fair to say that John Lewis has been doing well into its divided segments but the need of the hour is to have a competitive marketing plan in place which would further improve the profits and compete against the likes of Tesco, Wal-Mart and France’s Carrefour.... It is the fourth major player should its revenue be considered, it is in the top five for sure should profitability be considered. John Lewis is a much diversified organization, it is doing quite well. The company operates in televisions, travelling, electrical so on and so forth. It is fair to say that John Lewis has been doing well into its divided segments but the need of the hour is to have a competitive marketing plan in place which would further improve the profits and compete against the likes of Tesco, Wal-Mart and France’s Carrefour. Marketing plan for the organization is as follows: Market Demographics One of the most crucial parts of a marketing plan is situational analysis; important factors like SWOT analysis, organizational strategies, marketing effectiveness, and customers are discussed under situational analysis. It is ideal to apply the FEPOS approach under situational analysis, FEPOS approach will shed light upon functions, environment, productivity, systems, organizations and lastly strategy will be discussed. Functions: Operating in diverse areas that are profitable for the company is very useful, for instance more and more people are opting to buy LCD and LED TVs, John Lewis sells these HD TVs in its store as well as online, this is very helpful and should be continued in the future. Electronic goods are also sold by the company which is again really good. Consumer electronics is in demand these days, the disposable income in the hands of the people has increased and as a result of which they have started buying electronic goods, this is a wonderful opportunity for John Lewis to capitalize upon. Environment: The environment is

TOWER OF LONDON (LONDON) Essay Example | Topics and Well Written Essays - 3250 words

TOWER OF LONDON (LONDON) - Essay Example The Tower of London which is also known as ‘Her Majesty’s Royal Palace and Fortress’ is the royal palace of England which is made up of several buildings. The Tower of London was made in order to control and protect the whole city. The architecture is a complex that consists of several buildings and is surrounded by a moat and defensive walls. It is a significantly important landmark in London famous for the several features that it has. The White Tower was built in 1078 by William the Conqueror and was marked as a symbol of oppression which was imposed by the new elites. The castle has been used for many purposes from being a prison to a royal residence. One of its most important features is that its Jewel House houses the Crown Jewels which include symbols of royalty, a collection of crowns, swords, rings, and scepters. These historical items and the layers of history which is related to the Tower of London is what make it significant since it was built and till today (Cline 14). The Tower of London was built in 1066 by William the Conqueror and it holds immense universal value because of its cultural features and qualities. Its finest quality is its landmark setting in the City of London which is suitable for both controlling and protecting the city. It is set as a gateway to the capital and previously as the gateway to the Norman kingdom. Its location was chosen strategically at the north-end of Thames River and it serves as a separation point between the powerful monarchy and the developing capital city. The tower served a double role as a protection provider for the city through the defence walls and structure as well as the structure to control the citizens. The tower was a very tall building and it was the highest in its surrounding till the 19th century (Parnell 32). The tower also served as a symbol of Norman power as it was built to demonstrate the Norman power. The Tower significantly represents the Norman Conquest of the 11th century more than

Agriculture Industry Linkages in the Economy of Jammu and Kashmir Essay Example for Free

Agriculture Industry Linkages in the Economy of Jammu and Kashmir Essay Agriculture plays an important role in contributing to socio-economic development in many countries. It is the primary source for employment, livelihood, and food security for the majority of rural people. The success of this continuation depends largely on the direct impact it has on the national economy as well as how the agricultural sector stimulates the growth of other sectors in the economy. Consequently, understanding the role of agriculture and its linkages to the rest of the economy is important. The inter-relationship between agriculture and industry has been a long debated issue in the development literature. In the Indian context the issue has acquired interest since industrial stagnation in the mid 1960s. Over the years the Indian economy has undergone a structural change in its sectoral composition: from a primary agro-based economy during the 1970s, the economy has emerged as predominant in industry. This has triggered an interest in readdressing the analytical and methodological aspects of the interlinkages between the two sectors the service sector since the 1990s. This structural changes and the uneven pattern of growth of agriculture, industry and service sector economy in the post reforms period is likely to appear substantial changes in the production and demand linkages among various the economy. At the same time the growing integration with the rest of the world in the post-reform period (post 1991 period) and the recent spurt of service sector led growth are also likely to have significant impact on the linkages between the agriculture and industry. This has triggered an interest in read dressing the analytical and methodological aspects of the interlinkages between the two sectors. That agriculture and industry being integral component of development process due to their mutual interdependence and symbiotic relationship, the contribution of agriculture to the economy in general and to industry in particular is well known in almost all the developing countries. However, the degree of interdependence may vary and also change over time. In the theory and empirical literature, the inter-relationship between agriculture and industry has been discussed from different channels. First, agriculture supplies food grains to industry to facilitate absorption of labour in the industry sector. Secondly, agriculture supplies the inputs like raw cotton, jute, tea, coffee etc. needed by the agro-based industries. Thirdly, industry supplies industrial inputs, such as fertilizer, pesticides, machinery etc. to the agriculture sector. Fourthly, agriculture influences the output of industrial consumer goods through demand. Fifthly, agriculture generates surpluses of savings, which can be mobilized for investment in industry, and other sectors of the economy. Sixthly, fluctuations in agricultural production may affect private corporate investment decisions through the impact of the terms of trade on profitability, whereas some of these channels emphasize the agriculture-industry‟ linkage on the supply side or production side, others stress the linkages through the demand side. The production linkages basically arise from the interdependence of the sectors for meeting the needs of their productive inputs, whereas the demand linkage arises from the interdependence of the sectors for meeting final consumption. Further, the linkages between the two sectors can also be categorized into two groups based on the direction of interdependence. One is the backward linkage, which identifies how a sector depends on others for their input supplies and the other is the forward linkage, which identifies how the sector distributes its outputs to the remaining economy. More importantly, these two linkages can indicate a sector’s economic pull and push, because the direction and level of such linkages present the potential capacity of each sector to stimulate other sectors and then reflect the role of this sector accordingly. As far as Jammu and Kashmir is concerned Agriculture is the predominant sector of the economy. Directly and indirectly, it supports about 80 per cent of the population besides contributing nearly 60 per cent of the state revenue, which adequately explains the over-dependency of the population on agriculture. The overall economic growth of the state depends largely on the progress of the agricultural sector, the development of which becomes even more important in the context of the very nominal progress it has made in the secondary sectors. With the introduction of planned development in the state during 1951-56, production of foodgrains and fruits has increased considerably. During 1998-99, the state produced 15.50 lakh quintals of food grains against 4.53 lakh quintal in 1950-51. Of this, Kashmir region contributed 27.20 per cent, Jammu region 72.14 per cent and Ladakh and Kargil region 0.66 per cent Industries play a vital role in the development of an economy. In this regard unfortunately, JK has not been able to attract investments in industries and remained as an industrially backward state. The state does not have a strong industrial base, because geographical location of the state is such that the setting up of large industries with a large Capital base is not feasible, besides adverse environmental consequences. Nevertheless, many small and medium-scale industries have come up basically in the traditional sectors along with areas like food processing, agro-based units and metallic and non metallic products. Thus in such an sectoral environment were industrial sector has low opportunity, Agriculture provide basic linkages in its development . Thus the state of Jammu and Kashmir were main source of income is agriculture for masses of people, the linkages between Agriculture and Industry is very important to study in order to know the potential of Agriculture to develop an industrial environment in the state. In mean while it is important to study the dependence of agriculture on industry, so that both sectors will flourish the development in the state of Jammu Kashmir. The macroeconomic linkage between the agricultural sector and industrial growth has been one of the most widely investigated in the development literature. In the early stages, researchers paid great attention in studying the relationship between the agricultural and industrial sectors, and how these sectors were inter-related. They argued that agriculture only plays a passive role; which is to be the most important source of resources (food, fiber, and raw material) for the development of industry and other nonagricultural sectors (Rosenstein-Rodan, 1943; Lewis, 1954; Ranis and Fei, 1961). Many of these analysts highlighted agriculture for its resource abundance, and its ability to transfer surpluses to the more important industrial sector. India being a predominantly agrarian economy and an agro-based industrial structure, the interrelationship between agriculture and industry has been one of the major issues for the researchers and policy makers since the beginning of the planning period. In the pre and early post-independence period, the industry sector had a close relationship with agriculture due to the agro-based industrial structure (Satyasai and Baidyanathan, 1997). Satyasai and Viswanathan (1999) found that the output elasticity of industry with respect to agriculture was 0.13 during 1950-51 to 1965-66. Rangarajan (1982) has found that a 1.0 percent growth in agricultural production increases industrial production by 0.5 percent, and thus, GDP by 0.7 percent during 1961-1972. However, the industrial sector witnessed a slow growth, stagnation since the mid 1960s, which was largely attributed to the stunnedagricultural growth and favourable agricultural TOT, among other factors (Patnaik, 1972; Nayyar, 1978 and Bhatla, 2003).10 In fact the interdependence between the two sectors has found to be weakened during the 1980s and 1990s (Bhattacharya and Mitra, 1989; Satyasai and Viswanathan, 1997). For instance, Bhattacharya and Rao (1986) have found that the partial output elasticity of industry with respect to agriculture has declined from 0.15 during 1951/52 – 1965/66 to 0.03 during 1966/67-1983/84. Contradictorily, Satyasai and Viswanathan (1999) found that the output elasticity of industry with respect to agriculture has increased from 0.13 during 1950/51-1965/66 to 0.18 during 1966/67–1983/84, and then remained at the same level 0.18 during 1984/85-1996/97. The deteriorating linkages between agriculture and industry have been primarily credited to the deficiency in demand for agricultural products, decline in share of agro-based industries coupled with slow employment growth (Rangarajan, 1982; Bhattacharya and Rao, 1986; and Chowdhury and Chowdhury, 1995). Sastry et al. (2003), for the period 1981-82 to 1999-2000, found that the forward production linkage between agriculture and industry has declined, whereas backward production linkage has increased. They also found significant impact of agricultural output on industrial output, and that agriculture’s demand linkage to industry has declined, while that of from industry to agriculture has increased. Economic and Political Weekly August 26, 1989 1963 wean agriculture and merely the set of industrial consumption goods like clothing, footwear, sugar and edible oils, it may be concluded that the overall intersectoral linkages appear quite modest. The early writers, for example Rosestein-Rodan (1943), Lewis (1954), Scitovosky (1954), Hirchman (1958), Jorgeson (1961), Fei and Ranis (1961) and others emphasized the role of agriculture only as a primary supplier of wage goods and raw materials and abundant labour supply to industry (Johnston and Mellor, 1961 and Vogel, 1994). The role of agriculture in the transformation of a developing economy was seen as ancillary to the central strategy of accelerating the pace of industrialization (Vogel, 1994). Kalecki (1976) also pointed out the importance of investment and technological advances in agriculture for the rapid development of industry. The traditional literature on inter-sectoral linkages in the growth process generally emphasises the role of agriculture as a primary supplier of wage goods and raw materials to industry (supply-linkage on the one hand and as a provider of major output for in- dustrial goods (demand linkage) on the other [Johnston and Mellor, 1961 and tertiary sector in a modern economy. Further, it may be noted that with growing mechanization of agriculture it becomes dependent on industry for basic inputs, like, fertiliser, power, pesticides, etc. Incidentally the agriculture-industry relationship becomes more complicated in this process. A slow growth of net availability of food- grains or alternatively the movement of inter-sectoral terms of trade in favor of the agricultural sector is believed to cause deceleration of the industrial sector. However, empirically speaking there was no slow down in the growth of production of food- grains after the mid-sixties [Ahluwalia: 1985]. Nor was there any fall in the marketed surplus of agriculture [rhamarajakshi: 1977] so as to be related to the industrial decelera- tion. But, so far as the agriculture vis-à  -vis industry terms of trade is concerned, one en- counters a series of mixed evidence. Whe Thamarajakshi [1977], and Mitra [1977] visualised a favouralJe terms of trade for the agricultural sector during the mid-sixties andearly seventies, Khalon and lyagi [1983] obtained evidence that stand quite contrary to others view. Mundle [1977], however main- tains that in terms of intersectoral resource flow-of which terms of trade is just a single component-the industrial sector has been undergoing loss since the mid-sixties. Prior to that it was agriculture which was experiencing an outflow of resources. Rangarajan [1982a] in his macro econometric model makes an attempt to capture the demand linkage between agriculture and industry. He identifies a positive impact that agricultural output has on the demand for industrial consumption goods. The effect of foodgrain terms of trade on industrial products has been negative but elasticity is negligible. Both agricultural output and terms of trade had a positive influence on household saving and investment. Keeping in view such segmented impact of agriculture on industry zplaining the behaviour of indugtrial produc- tion purely in terms of agricultural performance .Bhattacharya and Rao [1986] emphasisesthe sluggishness that continued in the per-formance of industry even after the relative relaxation of the wage goods constraint that occurred during the green revolution period. Thus, the theoretical literature in the â€Å"agriculture-industry linkages † has broadly highlighted the place of agriculture and non-agriculture sector, especially industry in the development process and contribution of each in augmenting growth of output and employment. Most of the theoretical literature has largely focused only on one side of the â€Å"agriculture-industry linkages ’’ i.e. either the supply side linkages or demand side linkages. However it is both the demand side and supply side linkages that work together in an inter-sectoral framework, which determines the interlinkages between the two sectors. In this respect Bhaduri (2003) and Bhaduri (2007) are two important contributions in the literature. Bhaduri (2003) extends Kaldor’s model by considering the role of the agricultural surplus from the supply side as well as the importance of the demand side effect for industrial goods. In this set up, both the sectors grow in tandem, reinforcing and reinvigorating each other’s growth impulse, by resolving each other’s potential realization problem (Jha, 2010). Further, Bhaduri et al. (2007) have extended the Kaldor’s model by contrasting between the supply side and demand side linkages of the two sectors from the TOT point of view. Thus there has been lot of researches, publication and models on the topic â€Å"Agriculture industry linkages in the economy† given by many renowned economists, and peoples associated with this field. Everyone concluded that there is an unlimited linkage between two sectors which not only develop one other but also give birth to other sectors as well. Thus to conclude it can be said that in an economy mostly there is a l arge number of linkages originated from a primary level and put economy to those sectors which keep it in the level of developed ones.

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