The Finance Theory, Equity And Financial Crisis - 994 Words

1.0 Introduction The bankers’ remuneration problem becomes a ‘populist’ issues especially during the financial crisis in 2007. It is said that one of the factors that contribute to the financial crisis and this is not the first time this point has been raised. General concern about the relationship between certain low corporate performance and high remuneration to executives in banks means there exists an imbalance between them (Andrew Clark, Tim Edmonds, 2015). With the Government investing public money in certain famous Banking Group, this problem has upgraded from a private sector concern to a significant political one (BBC News, 2008). However, this cannot blame on single body or organization. A lot of researchers have explored the problem of remuneration systems and how to improve the remuneration structure in the banks. This essay mainly uses agency theory, stakeholder theory, institutional theory, Transaction cost theory and other related theories to explain how the remuner ation packages influence the bankers in short-term and long-term. Meanwhile, it also shows some problems of remuneration system in corporates especially in banks by analysing the recent literature. Finally, the essay gives certain relating recommendations to solve these problems according to a few policies such as UK corporate combined governance codes in 2003 and 2014 etc. 2.0 Remuneration package A remuneration package is a considerable system that employers run a better effective businessShow MoreRelatedWhy Do Firms Choose Their Capital Structure?1623 Words   |  7 Pages1. Introduction In order to grow, an enterprise needs investments. So they need to start wondering about which securities to acquire and how to finance those investments: with equity, debt or a combination of both (Myers, 2001). 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