African American Culture Essay

African American culture in the United States includes the various cultural traditions of African ethnic groups. It is both part of and distinct from American culture. The U. S. Census Bureau defines African Americans as â€Å"people having origins in any of the Black race groups of Africa. â€Å"[1] African American culture is indigenous to the descendants in the U. S. of survivors of the Middle Passage. It is rooted in Africa and is an amalgam of chiefly sub-Saharan African and Sahelean cultures. Although slavery greatly restricted the ability of Africans in America to practice their cultural traditions, many practices, values and beliefs survived and over time have incorporated elements of European American culture. There are even certain facets of African American culture that were brought into being or made more prominent as a result of slavery; an example of this is how drumming became used as a means of communication and establishing a community identity during that time. The result is a dynamic, creative culture that has had and continues to have a profound impact on mainstream American culture and on world culture as well. After Emancipation, these uniquely African American traditions continued to grow. They developed into distinctive traditions in music, art, literature, religion, food, holidays, amongst others. While for some time sociologists, such as Gunnar Myrdal and Patrick Moynihan, believed that African Americans had lost most cultural ties with Africa, anthropological field research by Melville Hersovits and others demonstrated that there is a continuum of African traditions among Africans in the New World from the West Indies to the United States. The greatest influence of African cultural practices on European cultures is found below the Mason-Dixon in the southeastern United States, especially in the Carolinas among the Gullah people and in Louisiana. African American culture often developed separately from mainstream American culture because of African Americans’ desire to practice their own traditions, as well as the persistence of racial segregation in America. Consequently African American culture has become a significant part of American culture and yet, at the same time, remains a distinct culture apart from it. History From the earliest days of slavery, slave owners sought to exercise control over their slaves by attempting to strip them of their African culture. The physical isolation and societal marginalization of African slaves and, later, of their free progeny, however, actually facilitated the retention of significant elements of traditional culture among Africans in the New World generally, and in the U. S. in particular. Slave owners deliberately tried to repress political organization in order to deal with the many slave rebellions that took place in the southern United States, Brazil, Haiti, and the Dutch Guyanas. African cultures,slavery,slave rebellions,and the civil rights movements(circa 1800s-160s)have shaped African American religious, familial, political and economic behaviors. The imprint of Africa is evident in myriad ways, in politics, economics, language, music, hairstyles, fashion, dance, religion and worldview, and food preparation methods. In the United States, the very legislation that was designed to strip slaves of culture and deny them education served in many ways to strengthen it. In turn, African American culture has had a pervasive, transformative impact on myriad elements of mainstream American culture, among them language, music, dance, religion, cuisine, and agriculture. This process of mutual creative exchange is called creolization. Over time, the culture of African slaves and their descendants has been ubiquitous in its impact on not only the dominant American culture, but on world culture as well. Oral tradition Slaveholders limited or prohibited education of enslaved African Americans because they believed it might lead to revolts or escape plans. Hence, African-based oral traditions became the primary means of preserving history, morals, and other cultural information among the people. This was consistent with the griot practices of oral history in many African and other cultures that did not rely on the written word. Many of these cultural elements have been passed from generation to generation through storytelling. The folktales provided African Americans the opportunity to inspire and educate one another. Examples of African American folktales include trickster tales of Br’er Rabbit and heroic tales such as that of John Henry. The Uncle Remus stories by Joel Chandler Harris helped to bring African American folk tales into mainstream adoption. Harris did not appreciate the complexity of the stories nor their potential for a lasting impact on society. Characteristics of the African American oral tradition present themselves in a number of forms. African American preachers tend to perform rather than simply speak. The emotion of the subject is carried through the speaker’s tone, volume, and movement, which tend to mirror the rising action, climax, and descending action of the sermon. Often song, dance, verse and structured pauses are placed throughout the sermon. Techniques such as call-and-response are used to bring the audience into the presentation. In direct contrast to recent tradition in other American and Western cultures, it is an acceptable and common audience reaction to interrupt and affirm the speaker. Spoken word is another example of how the African American oral tradition influences modern American popular culture. Spoken word artists employ the same techniques as African American preachers including movement, rhythm, and audience participation. Rap music from the 1980’s and beyond has been seen as an extension of oral culture. Harlem Renaissance [pic] Zora Neale Hurston was a prominent literary figure during the Harlem Renaissance. Main article: Harlem Renaissance The first major public recognition of African American culture occurred during the Harlem Renaissance. In the 1920s and 1930s, African American music, literature, and art gained wide notice. Authors such as Zora Neale Hurston and Nella Larsen and poets such as Langston Hughes, Claude McKay, and Countee Cullen wrote works describing the African American experience. Jazz, swing, blues and other musical forms entered American popular music. African American artists such as William H. Johnson and Palmer Hayden created unique works of art featuring African Americans. The Harlem Renaissance was also a time of increased political involvement for African Americans. Among the notable African American political movements founded in the early 20th century are the United Negro Improvement Association and the National Association for the Advancement of Colored People. The Nation of Islam, a notable Islamic religious movement, also began in the early 1930s. African American cultural movement The Black Power movement of the 1960s and 1970s followed in the wake of the non-violent American Civil Rights Movement. The movement promoted racial pride and ethnic cohesion in contrast to the focus on integration of the Civil Rights Movement, and adopted a more militant posture in the face of racism. It also inspired a new renaissance in African American literary and artistic expression generally referred to as the African American or â€Å"Black Arts Movement. † The works of popular recording artists such as Nina Simone (Young, Gifted and Black) and The Impressions (Keep On Pushin’), as well as the poetry, fine arts and literature of the time, shaped and reflected the growing racial and political consciousness. Among the most prominent writers of the African American Arts Movement were poet Nikki Giovanni; poet and publisher Don L. Lee, who later became known as Haki Madhubuti; poet and playwright Leroi Jones, later known as Amiri Baraka; and Sonia Sanchez. Other influential writers were Ed Bullins, Dudley Randall, Mari Evans, June Jordan, Larry Neal and Ahmos Zu-Bolton. Another major aspect of the African American Arts Movement was the infusion of the African aesthetic, a return to a collective cultural sensibility and ethnic pride that was much in evidence during the Harlem Renaissance and in the celebration of Negritude among the artistic and literary circles in the U. S. , Caribbean and the African continent nearly four decades earlier: the idea that â€Å"black is beautiful. † During this time, there was a resurgence of interest in, and an embrace of, elements of African culture within African American culture that had been suppressed or devalued to conform to Eurocentric America. Natural hairstyles, such as the afro, and African clothing, such as the dashiki, gained popularity. More importantly, the African American aesthetic encouraged personal pride and political awareness among African Americans. Music [pic] Men playing the djembe, a traditional West African drum adopted into African American and American culture. The bags and the clothing of the man on the right are printed with traditional kente cloth patterns. African American music is rooted in the typically polyrhythmic music of the ethnic groups of Africa, specifically those in the Western, Sahelean, and Sub-Saharan regions. African oral traditions, nurtured in slavery, encouraged the use of music to pass on history, teach lessons, ease suffering, and relay messages. The African pedigree of African American music is evident in some common elements: call and response, syncopation, percussion, improvisation, swung notes, blue notes, the use of falsetto, melisma, and complex multi-part harmony. During slavery, Africans in America blended traditional European hymns with African elements to create spirituals. Many African Americans sing Lift Ev’ry Voice and Sing in addition to the American national anthem, The Star-Spangled Banner, or in lieu of it. Written by James Weldon Johnson and John Rosamond Johnson in 1900 to be performed for the birthday of Abraham Lincoln, the song was, and continues to be, a popular way for African Americans to recall past struggles and express ethnic solidarity, faith and hope for the future. The song was adopted as the â€Å"Negro National Anthem† by the NAACP in 1919. African American children are taught the song at school, church or by their families. Lift Ev’ry Voice and Sing traditionally is sung immediately following, or instead of, The Star-Spangled Banner at events hosted by African American churches, schools, and other organizations. In the 1800s, as the result of the blackface minstrel show, African American music entered mainstream American society. By the early twentieth century, several musical forms with origins in the African American community had transformed American popular music. Aided by the technological innovations of radio and phonograph records, ragtime, jazz, blues, and swing also became popular overseas, and the 1920s became known as the Jazz Age. The early 20th century also saw the creation of the first African American Broadway shows, films such as King Vidor’s Hallelujah!, and operas such as George Gershwin’s Porgy and Bess. Rock and roll, doo wop, soul, and R&B developed in the mid 20th century. These genres became very popular in white audiences and were influences for other genres such as surf. The dozens, an urban African American tradition of using rhyming slang to put down your enemies (or friends) developed through the smart-ass street jive of the early Seventies into a new form of music. In the South Bronx, the half speaking, half singing rhythmic street talk of ‘rapping’ grew into the hugely successful cultural force known as Hip Hop. Hip Hop would become a multicultural movement. However, it is still important to many African Americans. The African American Cultural Movement of the 1960s and 1970s also fueled the growth of funk and later hip-hop forms such as rap, hip house, new jack swing and go go. African American music has experienced far more widespread acceptance in American popular music in the 21st century than ever before. In addition to continuing to develop newer musical forms, modern artists have also started a rebirth of older genres in the form of genres such as neo soul and modern funk-inspired groups. Dance [pic]. The Cakewalk was the first African American dance to gain widespread popularity in the United States. [pic] African American dance, like other aspects of African American culture, finds its earliest roots in the dances of the hundreds of African ethnic groups that made up African slaves in the Americas as well as influences from European sources in the United States. Dance in the African tradition, and thus in the tradition of slaves, was a part of both every day life and special occasions. Many of these traditions such as get down, ring shouts, and other elements of African body language survive as elements of modern dance. In the 1800s, African American dance began to appear in minstrel shows. These shows often presented African Americans as caricatures for ridicule to large audiences. The first African American dance to become popular with White dancers was the cakewalk in 1891. Later dances to follow in this tradition include the Charleston, the Lindy Hop, and the Jitterbug. During the Harlem Renaissance, all African American Broadway shows such as Shuffle Along helped to establish and legitimize African American dancers. African American dance forms such as tap, a combination of African and European influences, gained widespread popularity thanks to dancers such as Bill Robinson and were used by leading White choreographers who often hired African American dancers. Contemporary African American dance is descended from these earlier forms and also draws influence from African and Caribbean dance forms. Groups such as the Alvin Ailey American Dance Theater have continued to contribute to the growth of this form. Modern popular dance in America is also greatly influenced by African American dance. American popular dance has also drawn many influences from African American dance most notably in the hip hop genre. Art [pic] Sand Dunes at Sunset, Atlantic City by Henry Ossawa Tanner 1859-1937 From its early origins in slave communities, through the end of the twentieth century, African-American art has made a vital contribution to the art of the United States. During the period between the 1600s and the early 1800s, art took the form of small drums, quilts, wrought-iron figures and ceramic vessels in the southern United States. These artifacts have similarities with comparable crafts in West and Central Africa. In contrast, African American artisans like the New England–based engraver Scipio Moorhead and the Baltimore portrait painter Joshua Johnson created art that was conceived in a thoroughly western European fashion. During the 1800s, Harriet Powers made quilts in rural Georgia, United States that are now considered among the finest examples of nineteenth-century Southern quilting. Later in the 20th century, the women of Gee’s Bend developed a distinctive, bold, and sophisticated quilting style based on traditional African American quilts with a geometric simplicity that developed separately but was like that of Amish quilts and modern art. After the American Civil War, museums and galleries began more frequently to display the work of African American artists. Cultural expression in mainstream venues was still limited by the dominant European aesthetic and by racial prejudice. To increase the visibility of their work, many African American artists traveled to Europe where they had greater freedom. It was not until the Harlem Renaissance that more whites began to pay attention to African American art in America. [pic] Kara Walker, Cut, Cut paper and adhesive on wall, Brent Sikkema NYC. During the 1920s, artists such as Raymond Barthe, Aaron Douglas, Augusta Savage, and photographer James Van Der Zee became well known for their work. During the Great Depression, new opportunities arose for these and other African American artists under the WPA. In later years, other programs and institutions, such as the New York City-based Harmon Foundation, helped to foster African American artistic talent. Augusta Savage, Elizabeth Catlett, Lois Mailou Jones, Romare Bearden, Jacob Lawrence and others exhibited in museums and juried art shows, and built reputations and followings for themselves. In the 1950s and 1960s, there were very few widely accepted African American artists. Despite this, The Highwaymen, a loose association of 27 African American artists from Ft. Pierce, Florida, created idyllic, quickly realized images of the Florida landscape and peddled some 50,000 of them from the trunks of their cars. They sold their art directly to the public rather than through galleries and art agents, thus receiving the name â€Å"The Highwaymen†. Rediscovered in the mid-1990s, today they are recognized as an important part of American folk history. Their artwork is widely collected by enthusiasts and original pieces can easily fetch thousands of dollars in auctions and sales. The Black Arts Movement of the 1960s and 1970s was another period of resurgent interest in African American art. During this period, several African-American artists gained national prominence, among them Lou Stovall, Ed Love, Charles White, and Jeff Donaldson. Donaldson and a group of African-American artists formed the Afrocentric collective AFRICOBRA, which remains in existence today. The sculptor Martin Puryear, whose work has been acclaimed for years, is being honored with a 30-year retrospective of his work at the Museum of Modern Art in New York starting November 2007. Notable contemporary African American artists include David Hammons, Eugene J. Martin, Charles Tolliver, and Kara Walker. Literature [pic] Langston Hughes, a notable African American poet of the Harlem Renaissance. African American literature has its roots in the oral traditions of African slaves in America. The slaves used stories and fables in much the same way as they used music. These stories influenced the earliest African American writers and poets in the 18thcentury such as Phillis Wheatley and Olaudah Equiano. These authors reached early high points by telling slave narratives. During the early 20th century Harlem Renaissance, numerous authors and poets, such as Langston Hughes, W. E. B. Dubois, and Booker T. Washington, grappled with how to respond to discrimination in America. Authors during the Civil Rights era, such as Richard Wright, James Baldwin and Gwendolyn Brooks wrote about issues of racial segregation, oppression and other aspects of African American life. This tradition continues today with authors who have been accepted as an integral part of American literature, with works such as Roots: The Saga of an American Family by Alex Haley, The Color Purple by Alice Walker, and Beloved by Nobel Prize-winning Toni Morrison, and series by Octavia Butler and Walter Mosley that have achieved both best-selling and/or award-winning status. Museums The African American Museum Movement emerged during the 1950s and 1960s to preserve the heritage of the African American experience and to ensure its proper interpretation in American history. Museums devoted to African American history are found in many African American neighborhoods. Institutions such as the African American Museum and Library at Oakland and The African American Museum in Cleveland were created by African Americans to teach and investigate cultural history that, until recent decades was primarily preserved trough oral traditions. Language Generations of hardships imposed on the African American community created distinctive language patterns. Slave owners often intentionally mixed people who spoke different African languages to discourage communication in any language other than English. This, combined with prohibitions against education, led to the development of pidgins, simplified mixtures of two or more languages that speakers of different languages could use to communicate. Examples of pidgins that became fully developed languages include Creole, common to Haiti,and Gullah, common to the Sea Islands off the coast of South Carolina and Georgia. African American Vernacular English is a type variety (dialect, ethnolect and sociolect) of the American English language closely associated with the speech of but not exclusive to African Americans. While AAVE is academically considered a legitimate dialect because of its logical structure, some of both Caucasians and African Americans consider it slang or the result of a poor command of Standard American English. Inner city African American children who are isolated by speaking only AAVE have more difficulty with standardized testing and, after school, moving to the mainstream world for work. It is common for many speakers of AAVE to code switch between AAVE and Standard American English depending on the setting. Fashion and aesthetics [pic]. A man weaving kente cloth in Ghana. Attire The cultural explosion of the 1960s saw the incorporation of surviving cultural dress with elements from modern fashion and West African traditional clothing to create a uniquely African American traditional style. Kente cloth is the best known African textile. These festive woven patterns, which exist in numerous varieties, were originally made by the Ashanti and Ewe peoples of Ghana and Togo. Kente fabric also appears in a number of Western style fashions ranging from casual t-shirts to formal bow ties and cummerbunds. Kente strips are often sewn into liturgical and academic robes or worn as stoles. Since the Black Arts Movement, traditional African clothing has been popular amongst African Americans for both formal and informal occasions. Another common aspect of fashion in African American culture involves the appropriate dress for worship in the Black church. It is expected in most churches that an individual should present their best appearance for worship. African American women in particular are known for wearing vibrant dresses and suits. An interpretation of a passage from the Christian Bible, â€Å"†¦every woman who prays or prophesies with her head uncovered dishonors her head†¦ â€Å", has led to the tradition of wearing elaborate Sunday hats, sometimes known as â€Å"crowns. † Hair Hair styling in African American culture is greatly varied. African American hair is typically composed of tightly coiled curls. The predominant styles for women involve the straightening of the hair through the application of heat or chemical processes. These treatments form the base for the most commonly socially acceptable hairstyles in the United States. Alternatively, the predominant and most socially acceptable practice for men is to leave one’s hair natural. Often, as men age and begin to lose their hair, the hair is either closely cropped, or the head is shaved completely free of hair. However, since the 1960s, natural hairstyles, such as the afro, braids, and dreadlocks, have been growing in popularity. Although the association with radical political movements and their vast difference from mainstream Western hairstyles, the styles have not yet attained widespread social acceptance. Maintaining facial hair is more prevalent among African American men than in other male populations in the U. S. In fact, the soul patch is so named because African American men, particularly jazz musicians, popularized the style. The preference for facial hair among African American men is due partly to personal taste, but because they are more prone than other ethnic groups to develop a condition known as pseudofolliculitis barbae, commonly referred to as razor bumps, many prefer not to shave. Body image The European aesthetic and attendant mainstream concepts of beauty are often at odds with the African body form. Because of this, African American women often find themselves under pressure to conform to European standards of beauty. Still, there are individuals and groups who are working towards raising the standing of the African aesthetic among African Americans and internationally as well. This includes efforts toward promoting as models those with clearly defined African features; the mainstreaming of natural hairstyles; and, in women, fuller, more voluptuous body types. Religion While African Americans practice a number of religions, Protestant Christianity is by far the most popular. Additionally, 14% of Muslims in the United States and Canada are African American. Christianity [pic] A river baptism in New Bern, North Carolina near the turn of the 20th century. The religious institutions of African American Christians commonly are referred tocollectively as the black church. During slavery, many slaves were stripped of their African belief systems and typically denied free religious practice. Slaves managed, however, to hang on to some practices by integrating them into Christian worship in secret meetings. These practices, including dance, shouts, African rhythms, and enthusiastic singing, remain a large part of worship in the African American church. African American churches taught that all people were equal in God’s eyes and viewed the doctrine of obedience to one’s master taught in white churches as hypocritical. Instead the African American church focused on the message of equality and hopes for a better future. Before and after emancipation, racial segregation in America prompted the development of organized African American denominations. The first of these was the AME Church founded by Richard Allen in 1787. An African American church is not necessarily a separate denomination. Several predominantly African American churches exist as members of predominantly white denominations. African American churches have served to provide African American people with leadership positions and opportunities to organize that were denied in mainstream American society. Because of this, African American pastors became the bridge between the African American and European American communities and thus played a crucial role in the American Civil Rights Movement. Like many Christians, African American Christians sometimes participate in or attend a Christmas play. Black Nativity by Langston Hughes is a re-telling of the classic Nativity story with gospel music. Productions can be found a African American theaters and churches all over the country. Islam [pic] A member of the Nation of Islam selling merchandise on a city street corner. Despite the popular assumption that the Nation represents all or most African American Muslims, less than 2% are members. Generations before the advent of the Atlantic slave trade, Islam was a thriving religion in West Africa due to its peaceful introduction via the lucrative trans-Saharan trade between prominent tribes in the southern Sahara and the Berbers to the North. In his attesting to this fact the West African scholar Cheikh Anta Diop explained: â€Å"The primary reason for the success of Islam in Black Africa†¦consequently stems from the fact that it was propagated peacefully at first by solitary Arabo-Berber travelers to certain Black kings and notables, who then spread it about them to those under their jurisdiction† Many first-generation slaves were often able to retain their Muslim identity, their descendants were not. Slaves were either forcibly converted to Christianity as was the case in the Catholic lands or were besieged with gross inconviences to their religious practice such as in the case of the Protestant American mainland. In the decades after slavery and particularly during the depression era, Islam reemerged in the form of highly visible and sometimes controversial heterodox movements in the African American community. The first of these of note was the Moorish Science Temple of America, founded by Noble Drew Ali. Ali had a profound influence on Wallace Fard, who later founded the Black nationalist Nation of Islam in 1930. Elijah Muhammad became head of the organization in 1934. Much like Malcolm X, who left the Nation of Islam in 1964, many African American Muslims now follow traditional Islam. A survey by the Council on American-Islamic Relations shows that 30% of Sunni Mosque attendees are African Americans. African American orthodox Muslims are often the victims of stereotypes, most notably the assumption that an African American Muslim is a member of the Nation of Islam. They are often viewed by the uneducated African-American community in general as less authentic than Muslims from the Middle East or South Asia while credibility is less of an issue with immigrant Muslims and Muslim world in general. Other religions. Aside from Christianity and Islam, there are also African Americans who follow Judaism, Buddhism, and a number of other religions. The Black Hebrew Israelites are a collection of African American Jewish religious organizations. Among their varied teachings, they often include that African Americans are descended from the Biblical Hebrews (sometimes with the paradoxical claim that the Jewish people are not). There is a small but growing number of African Americans who participate in African traditional religions, such as Vodou and Santeria or Ifa and diasporic traditions like Rastafarianism. Many of them are immigrants or descendants of immigrants from the Caribbean and South America, where these are practiced. Because of religious practices, such as animal sacrifice, which are no longer common among American religions and are often legally prohibited, these groups may be viewed negatively and are sometimes the victims of harassment. Life events For most African Americans, the observance of life events follows the pattern of mainstream American culture. There are some traditions which are unique to African Americans. Some African Americans have created new rites of passage that are linked to African traditions. Pre-teen and teenage boys and girls take classes to prepare them for adulthood. They are typically taught spirituality, responsibility, and leadership. Most of these programs are modeled after traditional African ceremonies, with the focus largely on embracing African ideologies rather than specific rituals. To this day, some African American couples choose to â€Å"jump the broom† as a part of their wedding ceremony. Although the practice, which can be traced back to Ghana, fell out of favor in the African American community after the end of slavery, it has experienced a slight resurgence in recent years as some couples seek to reaffirm their African heritage. Funeral traditions tend to vary based on a number of factors, including religion and location, but there are a number of commonalities. Probably the most important part of death and dying in the African American culture is the gathering of family and friends. Either in the last days before death or shortly after death, typically any friends and family members that can be reached are notified. This gathering helps to provide spiritual and emotional support, as well as assistance in making decisions and accomplishing everyday tasks. The spirituality of death is very important in African American culture. A member of the clergy or members of the religious community, or both, are typically present with the family through the entire process. Death is often viewed as transitory rather than final. Many services are called homegoings, instead of funerals, based on the belief that the person is going home to the afterlife. The entire end of life process is generally treated as a celebration of life rather than a mourning of loss. This is most notably demonstrated in the New Orleans Jazz Funeral tradition where upbeat music, dancing, and food encourage those gathered to be happy and celebrate the homegoing of a beloved friend. Cuisine [pic] A traditional soul food dinner consisting of fried chicken, candied yams, collard greens, cornbread, and macaroni and cheese. The cultivation and use of many agricultural products in the United States, such as yams, peanuts, rice, okra, sorghum, grits, watermelon, indigo dyes, and cotton, can be traced to African influences. African American foods reflect creative responses to racial and economic oppression and poverty. Under slavery, African Americans were not allowed to eat better cuts of meat, and after emancipation many often were too poor to afford them. Soul food, a hearty cuisine commonly associated with African Americans in the South (but also common to African Americans nationwide), makes creative use of inexpensive products procured through farming and subsistence hunting and fishing.

How does Macbeth’s and Lady Macbeth’s relationship change throughout the course of the play? Essay

Witches nowadays are seen as a bit of a joke and a laugh since they are used for entertainment like in the ‘Harry Potter’ novels, or when it is Halloween and children (and sometimes even adults) dress up as witches for fun or for trick and treating. Overall, Witches in modern times are not taken seriously but people were a lot more superstitious back when Queen Elizabeth I reigned as Queen of England; people in those times had a real fear and belief of witches. Their superstition was the product of the church’s teachings, yet, when Queen Elizabeth died and the new King James I of England and Scotland, succeeded to the throne; he was someone who was both obsessed and intrigued by witches. This new King was fascinated by the subject, a fact that William Shakespeare had to take on board. Shakespeare had to impress King James in order to enter his good books and keep his high status and wealth. This is because William Shakespeare was Queen Elizabeth’s official playwright and when she died, he risked losing his living and high social status. By using his playwright’s talents, some background research on the King’s ancestors and his fascination of witches to his advantage, he created his infamous play, ‘Macbeth’, which captured King James’ attention and kept Shakespeare as the official playwright. Macbeth was a successful soldier in the army of King Duncan. After the battle, Macbeth meets three witches who tell him that he is to become Thane of Cawdor and King. As part of the same prophecy, the Witches predict that future Kings will be descended not from Macbeth but from his fellow army captain, Banquo. â€Å"(First Witch) All hail Macbeth, hail to thee Thane of Glamis. (Second Witch) All hail Macbeth, hail to thee Thane of Cawdor. (Third Witch) All hail Macbeth, that shalt be King hereafter†. Banquo also receives a prophecy from the witches, â€Å"Thou shalt get kings, though thou be none†. Shortly after, Macbeth receives news that King Duncan has honoured him with the title, Thane of Cawdor. Although initially prepared to wait for fate to take its course, Macbeth is ambitious and sudden confusion arises when King Duncan nominates his son Malcolm as his heir. Macbeth is tempted and writes to his wife giving her the news. Lady Macbeth, upon hearing Macbeth’s promotion, calls upon evil spirits to help them achieve greatness; she dabbles with the dark arts and performs witchcraft in order to help her and her husband make the witches’ prophecies come true. It is here that we see Lady Macbeth’s true colours, it shows us that she is the more ambitious of the two as she has immediately taken steps to fulfill the prophecy and that she is the one who is more dominant in her actions. â€Å"Glamis thou art, and Cawdor, and shalt be what thou art promis’d: yet do I fear thy nature, it is too full o’ th’ milk of humane kindness, to catch the nearest way.† (Act 1, Scene 5) Returning to his castle, Macbeth’s ambitious wife, Lady Macbeth, tells her husband of her plan to murder Duncan and persuades Macbeth. It is here that we see the status of their relationship and realize that Lady Macbeth is â€Å"wearing the trousers† in this relationship. She is in control and can easily manipulate her husband. Macbeth realises that the murder of the king is the quickest way to achieve the destiny that her husband had been promised and when King Duncan pays a royal visit to Macbeth’s castle, Lady Macbeth sees this as the perfect opportunity to bring the prophecy to life. It is here that we see the dramatic irony take place. Both Macbeth, Lady Macbeth and the audience know that King Duncan will die once he stays over at Macbeth’s, but King Duncan himself does not know that his fate has been sealed. Here, we see the couple call each other endearments, for example, Macbeth calls Lady Macbeth â€Å"My dearest love† (Act 1, Scene 5), which suggests that they are a loving couple but at first Macbeth hesitates about killing King Duncan and Lady Macbeth is outraged, she takes control and scolds him, prevailing upon him again and again, which shows us she pushes and blackmails him revealing the positions in their relationship. She questions his manhood, â€Å"When you durst do it,† she says, â€Å"then you were a man†. Lady Macbeth wins out, she drugs the guards of the king’s bedchamber; then, at a given signal, Macbeth ascends to the King’s room and murders him while he sleeps. Lady Macbeth says she could not have killed King Duncan because he resembled her father, a figure which Lady Macbeth loved and cared for. â€Å"Had he not resembled My father as he slept, I had done’t†. Haunted by what he has done, Macbeth is once more scolded by his wife. It is here that we see Macbeth weaken and Lady Macbeth take almost complete control of their relationship. Suddenly, both are alarmed by a loud knocking at the castle door, but again, it is Lady Macbeth who takes control. The drunken porter of Macbeth’s castle opens the door to Macduff, a loyal follower of the king, who has been asked to awaken Duncan in preparation for the return journey. Macbeth, concealing the bloody truth, signals the location of the King’s room and Macduff heads towards it. He discovered the King’s body. When the murder is revealed, Macbeth kills the prime witnesses, the sleepy guards of the king’s bedchamber, and Lady Macbeth faints. The lords of Scotland present, including Macbeth, swear to avenge the murder. The King’s two sons flee in fear that they might be next, and this action raises suspicion that they might be the culprits. Donalbain flees to Ireland and Malcolm flees to raise an army in England. Macbeth is crowned the new king of Scotland, but, because of Banquo’s knowledge of the witches’ prophecy, Macbeth sees no other choice but to kill his friend, Banquo and his son Fleance, as he will be the successor after Macbeth. They both pose a threat to Macbeth but Macbeth does not tell Lady Macbeth of his plans this time, this shows he still cares for her and does not want her hands to be covered in blood anymore, thus taking on a more dominant role in their relationship. The hired murderers kill Banquo but Fleance escapes. At a banquet that night, Macbeth sees Banquo’s ghost at the dinner table and the audience see Macbeth weaken greatly as the ghost appears. Again, his wife tries to strengthen Macbeth. We see Lady Macbeth showing some of her irritation towards Macbeth, she is genuinely worried about him as she cannot see what he can and is trying to calm him, but on the other hand, she is also scolding him, desperate to save her neck and his, as she is trying to stop him from confessing Duncan’s murder. â€Å"O proper stuff: This is the very painting of your fear: This is the air-drawn dagger which you said Led you to Duncan. O, these flaws and starts (Imposters to true fear) would well become A woman’s story, at a winter’s fire Authoriz’d by her grandma: shame itself, Why do you make such faces? When all’s done You look but on a stool.† (Act 3, Scene 4). In the next scene, Macbeth returns to the Witches. The Witches not only confirm that the sons of Banquo will rule in Scotland, but they also add a new prophecy: Macbeth will be invincible in battle until the time when the forest of Birnam moves towards his stronghold at Dunsinane, â€Å"Macbeth shall never be vanquish’d be, until Great Birnam Wood, to high Dunsinane Hill Shall come against him.† (Act 4, Scene 1). They also predict that no man born of a woman shall hurt Macbeth, â€Å"Be bloody, bold and resolute: Laugh to scorn The power of man: for none of woman born shall harm Macbeth.† (Act 4, Scene 1). Ignoring both of these predictions because he thought they were nonsense, Macbeth prepares for invasion. When he is told that Macduff has deserted him, Macbeth begins the final stage of his tragic descent. His first move is the destruction of Macduff’s family; his wife and children. In England, Macduff receives the news at the very moment that he swears his allegiance to the young Malcolm. Malcolm persuades him that the murder of his family should act as the spur to revenge, â€Å"Be comforted. Let’s make medicines of our great revenge, To cure this deadly grief.† Meanwhile, in Scotland, Lady Macbeth has been taken ill: She walks in her sleep and seems to recall, in fragmentary memories, the details of the murder. It is here that she has no control over their relationship, moreover, her own sanity. Macbeth hears of her sanity deteriorating, yet he does not sound like he cares in the slightest, he sounds cold, emotionless, all he does is tell the doctor to â€Å"Cleanse the stuff’d bosom, of that perilous stuff Which weighs upon the heart†. In the end, she eventually falls to her death from the castle’s battlements. We do not know whether it was her insanity that caused her suicide, or the evil spirits that consumed her soul. Macbeth hears her scream, as he is informed of Lady Macbeth’s death, he acts as if he doesn’t care, he cold-heartedly said â€Å"she should have died hereafter†, his speech is pessimistic and full of despair which spells the end of their once loving relationship. Malcolm’s attacking army is advancing while Macbeth’s defenses are preparing. When Malcolm’s army disguise themselves with sawn-off branches from Birnam Wood, Macbeth sees what appears to be a wood moving towards his stronghold at Dunsinane. When he finally meets Macduff in single combat, his sworn enemy reveals that he came into the world by caesarean section; he was not, precisely speaking, â€Å"of woman born†, (Act 4, Scene 1). On hearing this news, Macbeth rejects one final time the Witches’ prophecy. With a loud cry, he launches himself at Macduff and is slain thus revealing the final twist to this tragedy. In the final scene, Malcolm is crowned as the new king of Scotland, to the acclaim of all. At first, Macbeth had a casual, loving relationship with Lady Macbeth. However, both their ambitions led them astray. Firstly, the relationship began to change when Macbeth became more dominant. This was when he ordered Banquo and his son Fleance murdered. â€Å"Be innocent of the knowledge, dearest chuck†, by saying this, not only is Macbeth protecting his wife, he is also taking on a more dominant role in their relationship. Clearly, he still loves his wife as he is protecting her. However, there is another twist in their marriage. In act 3 scene 4, we see the appearance of Banquo’s ghost at the banquet which only Macbeth can see, because of this; Macbeth is reduced to a weak, helpless man. Meanwhile, his wife, unsure of what is going on, appears to be sure footed and most definitely stronger than her husband. She scolds him and questions his manhood, â€Å"Are you a man?† Drawing to the end of the play, we see Macbeth take control again, while Lady Macbeth is slowly deteriorating along with her relationship to Macbeth, her mind is flooded with guilt and paranoia. We see the end of their relationship when Lady Macbeth falls off the battlements of the castle to her death. We do not know whether it was her guilt that caused her to commit suicide, or the evil spirits consuming her soul and driving her to die. Macbeth feels no emotion upon hearing of her death; instead he says life is meaningless and has no purpose, â€Å"is a tale Told by an idiot, full of sound and fury, Signifying nothing.† This is the end of their relationship. The audience initially has a good impression of their relationship. They called each other endearments and protected each other. In act 3, scene 2, we see Macbeth protecting his wife from finding out the bloody truth, even though he had performed evil deeds, the audience would’ve thought of him as a ‘good person’ or a loving husband beneath the blood stained ambition. In act 1, scene 5 however, Lady Macbeth reveals her true colours by calling forth evil spirits to aid her ambition to kill Duncan. Also, in act 4, scene 1, we see Macbeth’s true colours when he meets the witches for help. The audience now sees him as too deep in the blood for him to carry on, his time will come. When Lady Macbeth dies, he shows coldness, which creates hatred from the audience towards Macbeth. Indeed, his time comes, when he faces Macduff, and is slain. The audience now sees the classic victory over evil, performed by the good. In conclusion, Macbeth’s relationship with lady Macbeth slowly deteriorates throughout the course of the play, it seems that the more blood drenched onto Macbeth’s hand, the more dominant he grew and this weakened Lady Macbeth’s mental state. The audience sees them as a loving couple at first, calling each other endearments protecting each other, but their actions caught up with them, and they faced the consequences of meddling with the evil spirits. Their relationship is like a candle, slowly burning, burning through the wax, slowly deteriorating, until there is nothing left.

Premium-price Milk in the Company Coca-Cola Essay - 5

Premium-price Milk in the Company Coca-Cola - Essay Example In the dairy case, the milk is also free of lactose, and it will be sold while cold. The production line aims at offering the milk in various versions such as whole milk, fat-free, chocolate, and reduced fat versions. The decision of producing this product came up when the Coca-Cola Company realized that the sales of carbonated drinks continued to decline in the United States. The first issue it aimed to address is the decline in sales of its original product. Another issue is aimed at addressing is the fact that it is produced at a time when most of the consumers are obsessed with all products protein. According to research by NPD Group research firm, approximately 71% of the consumers say that they want more of the proteins in their diet. 3) Analyze some of the key (macro and/or micro) ENVIRONMENTAL FACTORS that resulted in Coca-Cola launching this new product. Note: for this, you will need to read the chapter that deals with the marketing environment. Steve Jones, who is the CEO of Fairlife, made a strong argument when he insisted that though Coca-Cola plays the part of distributing the milk, it does not take any role in the actual production of the milk and that it has nothing to be involved with what occurs on the dairy farms. He adds that people who have been referring to it as Coke Milk should not since it is actually not. The sole job of Coke, according to him, is the distribution of the milk and making sure that the milk is on the shelf. The market analysis and condition for the Coca-Cola’s Fairlife product seem to be somehow favoring while to some extent it is not so much on their side. The opportunity for the company after coming up with this product is that they have very limited competition since this is an uncharted sector. Again, having a good brand name globally, Coke expects to sell its milk product all over the world that  will, in turn, favor the growth.

Critical Thinking and Clinical Judgment Skills Written Assignment Essay

Critical Thinking and Clinical Judgment Skills Written Assignment - Essay Example Thus, critical thinking surpasses the provision of a way of ascertaining veracity, partial veracity or falsehood of a claim, to embrace and encompass the passing of judgment not just in academic fields, but in practical ventures as well. Nursing is one of these many ventures in which critical thinking is greatly applied. As a matter of fact, critical thinking and nursing are mutually inclusive of each other that any nurse devoid of critical thinking skills seldom succeeds. That critical thinking in nursing is indispensible is a matter which is underscored by the fact that it [critical thinking] helps nurses carry out the assessment process, question, evaluate, analyze and reconstruct the process of delivering nursing care, by logically and systematically challenging the established nursing theories and practices. The magnitude of critical thinking may therefore be seen in light of the discussion which ensues forthwith. Critical Thinking and Decision-Making in Patient Care In the firs t place, when going about the nursing process or duty, it will behoove the nurse to decide [by critically thinking through] the pieces of patient information which is critical, from those that are not. Those that have been determined as important may then be analyzed. After the analysis, the nurse may need to work closely and in consultation with the patient, so as to form a consensus, which is a mutually agreed upon care goals. In this case, the nurse will need to use sound judgment to arrive at key decisions, when and by studying a wide variety of sources and by making personal observations about the patient, in relation to his medical records. In this case, the nurse will need to incorporate and use a reflective component in decision-making. Herein, the reflective component is essentially a review of the judgements and the validation of these judgments’ appropriateness (Alfaro-Lefevre, 2009). Critical Thinking in Reconciling Nursing Practices and Ethical Issues When Admini stering Patient-Based Care Above all the needs of critical thinking in nursing, is the application of critical thinking in the delivery of patient-based care. Since patient-based supports the active participation of patients and their families in decision-making about individual options for a patient’s treatment and designing new care models for the patient’s treatment. This means that in administering patient-based care, the nurse will administer care which is responsive and respectful to an individual patient’s needs, values and preferences, and making sure that patient values are the rallying points to all clinical decisions. Herein, critical thinking will be critically applicable, since the administration of patient-based care sometimes seems constrained by, and to fundamentally clash with the dictates of medical and clinical rules and guidelines (Mann, 2012). Thus, Bowles (2000) observes that when administering patient-based care, the nurse will have to: ap preciate the importance of nursing guidelines and rules of medical care; factor the patient’s preferences, values and needs; and establish the status of the patient spelled out in his medical records; think through the options needed to strike the delicate balance among delivering patient-based care, not breaching nursing and medical guidelines and not subjecting the medical institution to legal liabilities. An instance which expressly exemplifies the situation above took place on

The Definition of an Operating Segment Essay Example | Topics and Well Written Essays - 750 words

The Definition of an Operating Segment - Essay Example Corporations that sell at the retail level, but who also have an online operation have multiple operating segments. The e-commerce operation would be considered an operating segment. Let’s take the Jiffy Lube business as an example. The money generated by the oil change operation would be considered an operating segment. The car wash operation of the business is another operating segment. Any food items sold inside the store in the waiting area would be a third operating segment of the company. 2. I agree with your definition of an operating segment. It is imperative for the CEO or COO of a company to evaluate the performance of each operating segment on a recurrent basis. Whenever an operating segment starts to under perform that segment could become unprofitable. A strategy that can be used by management to eliminate operating segments that are not generating profits is divesture. Divesture can be defined as the partial or full disposal of an investment or asset through sale, exchange, closure or bankruptcy (Investopedia, 2011). Investopedia.com (2011). Divesture. Retrieved September 7, 2011 from http://www.investopedia.com/terms/d/divestiture.asp#axzz1XEq4B6YF Effective and successful managers are able to generate profits from all the operating segments of a company. On many instances companies achieve expansion by adding operating segments to their operations. ... Two powerful stock exchanges are the NYSE and the LSE. The Securities and Exchange Act of 1933 requires companies to register with the SEC prior to going public. The Securities and Exchange Act of 1934 discusses the matter of being public. Once a company is public the SEC oversees its activities. The Securities and Exchange Act of 1934 regulates broker dealers and stock exchanges. 6. GAAP guidelines are used in the preparation of financial statement disclosures. Financial statement disclosures are comments or explanations listed in a company’s financial statements. Three types of items that are covered by disclosures and whose inclusion is mandatory based on GAAP rules are changes or errors, asset retirement and insurance contract modification. There are also voluntary disclosures included in the business reports of companies. Some voluntary disclosures include forward looking statements and management analysis. 5. The threshold to for an operating segment to be reportable is listed below: Reported revenue is at least 10 percent of combined revenue Reported profit (loss) is at least 10 percent of combined profit (loss) Assets are 10 percent or more of combined assets (Schroeder & Clark & Cathey, 2011). Schroeder, R.G., Clark, M.W., Cathey, J.M. (2011). Financial Accounting Theory and Analysis (10th ed.). New Jersey: John Wiley & Sons. 7. Weekly Summary Week 5 was very challenging, but I learned a lot about accounting during the week. The individual paper discussed pension funds. I learned that the use of pension funds became used a lot in corporate America after World War II. The accounting profession and the government have ensured that corporations respect the rights of retirees by properly funding pension funds. In

Terminal Design Concept Essay Example | Topics and Well Written Essays - 250 words

Terminal Design Concept - Essay Example d namely; pier satellite design, pier finger design, remote satellite design, transporter design, semicircular (curvilinear) design and linear design. Having analyzed the concepts mentioned above, the most appropriate and efficient design was a hybrid of linear and pier satellite design configurations. By description, the linear design concept involves a configuration with one building hosting both the ticketing and waiting area especially for small aircraft airports. The pier satellite terminal includes the same design as linear only that it involves more concourses connected to this main building thus creating several satellite structures. Considerations of best practices in modern airports influenced the hybrid selection decision. The need for short walking distances, for example, for passengers was assured by incorporating linear design to counter the excessive walking distances created by the rotunda-like pier satellite concept. A linear design concept guarantees a precise orientation where aircrafts park nose-in with respect to the terminal building. However, the orientation occasioned by the rotunda-like layout in the pier satellite design configuration is not a straight forward one. Simple construction of the main linear terminal building and the piers influenced the selection of the hybrid design configuration. The layout is simple and enables passengers to park their vehicles even right in front of the terminals before they enter through for boarding the aircraft. Adequate curb length is made possible by the pier satellite system since it is dependent on dwell time called so to mean the time has taken to remove passengers and their baggage. Thanks to the piers for decentralizing the clearing area and the no hub volume type of airport under consideration. In this case, there was enough area for terminal curb for through vehicles, baggage, and the passengers’ pickup. Small baggage system costs using decentralized system helps achieve pier satellite

Research Paper (Accounting Research paper) Example | Topics and Well Written Essays - 250 words

(Accounting ) - Research Paper Example They evaluated the Moore farm and ascertained a cost of $450,000 which is equivalent to the fair market value of an estate with geological flaw. The intention of the expertise was to organize the corporation to invest in building where each party will receive a just and equitable stock pursuant to the services or property contributed. Tim joined the joint venture after lawful consultation with his tax advisor where he opted to transfer the land for the sale instead of receiving the stock with a note of $450,000 bearing an interest after five years. Tim recognized a gain on the sale of land instead of a stock of $450,000. The gain of this interest is taxable pursuant to the internal revenue code. Concord Instruments Corporation, 67 TCM 3036, T.C. Memo. 1994-248, a related fact pattern, upheld that the oral instructions to the broker to sell the stock at a very high cost comprised of enough identification of the shares. Reg. Â § 1.107-1(c)(3) articulates that stock can only be identified fully when (1) a particular stock to be sold is identified by the taxpayer and (2) the broker in written form confirms the instructions of the taxpayer within a period deemed reasonable. The IRS’s position in concord case was that no written confirmation of the instructions of the taxpayer was provided as per regulation demands. It is, therefore, lawful that the gain amount to be recognized should follow the FIFO basis in determination of the cost incurred to the shares sold. The taxpayer had an obligation to admit the argument of the taxpayer. It was concluded that the regulations in action currently do not make the provision of exclusive ways of identifying the stock that is sold. The taxpayer was allowed by the court to use the specific identification method. In a similar case, The Internal Revenue Code Reg. section 1.1031(a)-I(c), the ruling involved the property of the same kind but

Changes that have occurred in the last generation with regard to Essay

Changes that have occurred in the last generation with regard to personal and family finances - Essay Example When the man of the house lost his job, the wife would join the workforce, providing the needed income until the man found another job. In instances of divorce the woman, who previously wasn’t working, would get a job to support her kids. A stay at home parent provided the necessary safety net during times of economic distress.Poor saving habit is another danger to the financial stabilities of today's families. If parents with two paychecks saved the second one then this would act as a safety net. With the change in generation, there has also been a significant decline in savings amongst families. Parents are using the additional incomes on extravagant items for their children and themselves. An increased push for housing in decent school districts is responsible for the financial crisis faced by many families at present. This situation is as a result of a loss of confidence of the education system. The government should increase investment in the schools that the middle incom e took their children to. The increased demand for these so-called decent preschools and good colleges lead a rise in their cost. The extra income earned by the woman pays for this. It is a fact that two-income families earn more today than what a family with individual breadwinners used to earn a generation ago. The cost of mortgage, taxes, health insurance and daycare are higher than before. The net effect is that the discretionary income of today's dual-income families is lower than before.

In the Midst of Pressures Essay Example | Topics and Well Written Essays - 500 words

In the Midst of Pressures - Essay Example He was concerned about how the people would react. He was already a hated man, being a white man and a police officer in a foreign land. He has become, as the storyteller reveals, a tyrant who has lost his freedom; being pushed by the people to do things against his will. He knows that as an officer, he should follow protocol, get near the elephant and test if it is still harmful or it is already safe for it to be left alone. However, the area where the elephant was eating is muddy and it would be dangerous for the officer to get near the elephant because there is the possibility that he would be trampled upon like the Indian killed by the beast. Although he was not concerned about his safety, he was thinking what a laughing stock he would become in his time of death when he gets killed by the elephant. Therefore, in this certain circumstance, he decided to kill the elephant even though that was not really his intention. Similarly, in the second story, the main character gave in to p ressure. When Langston was left all alone in his seat, with his friend looking down at him from the platform and the older members of the congregation and the priest wanting him to move forward and receive his salvation, the young man went to the podium.

Critically discuss the view that modern states, political power is Essay

Critically discuss the view that modern states, political power is concentrated in an elite group - Essay Example lated to power and political science in order to ascertain the actuality of the statement that whether political power of the modern states does actually remain concentrated in the hands of an elite group or not. The paper would also aim to critically discuss the various aspects related to the mentioned view in order to decipher the actual reality of the made statement or the perceived view and the reasons supporting it. The relevant theories in relation to power which would aid in order to affirm or contend the statement that political power is usually found to be concentrated within an elite group need to be adequately explored. The fundamental theory that needs to be discussed in this regard is the pluralist theory of power. According to this particular theory, power is perceived to be possessed by quite some form of groups present in the society and which are believed to contend with one another. It has been stated in this regard that as no specific group is known to control and rule over the other existing groups so, a ‘plurality’ with regard to the contending interest in relative to the fraction of collective individuals as well as the political parties is viewed to typify the democratic form of societies (Sociology.org, â€Å"A Level Sociology: A Resource-Based Learning Approach†). The other theory that requires to be mentioned with regard to the stated form of groups in the above mentioned ‘theory of power’ is the elite theory. This specific theory entails the notion that the existence of an uncomplicated plurality with regard to the competing groups present in the society is rather replaced by a succession of contending forms of elites. These mentioned forms of elites have been explained to be the group of powerful individuals who are considered to be competent enough to enforce their personal interests and desires on the overall society (Goertzel, â€Å"Theoretical Models in Political Sociology†). The elite theory with regard to the field of

IVe Seen the Promise Land Essay Example for Free

IVe Seen the Promise Land Essay Through understanding of his speeches and similar past leaders such as Moses and Jesus, it is clear how Dr. King established himself as the leader of the civil rights movement and his vision and strength led many to a better life filled with the freedoms that they had yearned for. The opening of this speech is inspirational yet it is also somewhat unexpected when put in the context of his other more famous works. When asked by God what age he would like to live in, he describes some of the most famous and wondrous places of all time, such as Ancient Greece or the Renaissance. Then, with a powerful swoop in his voice, he says: Strangely enough, I would turn to the Almighty, and say, ‘If you allow me to live just a few years in the second half of the 20th century, I will be happy. ’ Now thats a strange statement to make, because the world is all messed up. The nation is sick. Trouble is in the land; confusion all around. Thats a strange statement. But I know, somehow, that only when it is dark enough can you see the stars. Martin Luther King Jr. knew that the time had come to finally address the issues that had been conflicted within him as well as countless others. He states, â€Å"But now, no longer can they just talk about it. It is no longer a choice between violence and nonviolence in this world; its nonviolence or nonexistence. † He continued his speech by delivering messages from Jesus and various biblical passages to show why it is so important that they continued to be pushed forth and not remain idle. Even after their protest in Memphis they needed to keep marching forward, literally and figuratively. This speech was not only inspiring for the civil rights movements, but can also be used as an inspiration and a guideline to overcome any injustice that can be inflicted onto someone. Dr. King believed that when men and women had the mission of doing God’s will and standing up for what is right, that this would allow them to no longer fear death. Once you have conquered those who had at one point unjustly conquered you, then you are free. In addition to all the things Dr. King believed were needed to reach the â€Å"Promised Land†, the most important thing, though not directly stated by King, was the presence of an innate and inspirational leader who has a clear vision and the ability to express and correctly assert that vision onto those who want to quell injustice, along with the courage to fight against it himself. When you look at the difference between successful and also failed campaigns against injustice, the one thing that is always remembered is that in successful ones there was a leader who rallied his people. Moses was determined to lead the slaves out of Egypt and accomplished it by uniting them with his cause. Another example is Abraham Lincoln when he organized those around him and passed the Emancipation Proclamation of 1863. King Jr. embodied everything that Moses and Abraham Lincoln did for their people, and then some. Without him, the civil rights movement very well could have died down and the world would not be where it is at today. With this in mind, there are 3 key moments in Dr. King’s life that made him into the visionary who took on all the arduous tasks that were placed before him. First is the time he spent in Birmingham Jail and the letter he wrote. â€Å"Human progress†¦it comes through the tireless efforts of men willing to be coworkers with God, and without this hard work, time itself becomes an ally of the forces of social stagnation. This showed that he was willing to fight alongside his people and endure anything that they did, and that he would go to the greatest of lengths to make his point. The second and his most famous speech, â€Å"I Have a Dream†, delivered on August 28, 1963, not only sparked a fire under those who had already been involved, but additionally enlisted those who may not have had previously agreed with his beliefs or thought that change was not possible. It also gained global media attention and exposed his brilliance, showing what he truly envisioned for the future of his country. The third and final moment was his death the day after delivering his speech â€Å"I See the Promised Land†. His martyrdom was a symbol to all that things needed to, and were going to, change. From that very speech given in Memphis, he preached: Well, I dont know what will happen now. Weve got some difficult days ahead. But it really doesnt matter with me now, because Ive been to the mountaintop. And I dont mind. Like anybody, I would like to live a long life. Longevity has its place. But Im not concerned about that now. I just want to do Gods will. And Hes allowed me to go up to the mountain. And Ive looked over. And Ive seen the Promised Land. I may not get there with you. But I want you to know tonight, that we, as a people, will get to the promised land! In his speech â€Å"I’ve Been to the Mountaintop†, King delved into the current status of the civil rights movement and how he saw that the future was bright, as long as people continued to persevere in the face of adversity, and did not allow the opposition to deter them. He believed that they had come too far to let it slip away, and even without him as their leader he knows they can accomplish it. As with all other successful movements, a leader who is extremely persuasive, motivational, and is willing to do anything for what he believes in is key. For Dr. King, there were three crucial moments in his life that shaped him to become such, and they are: his prison time and letter from Birmingham Jail, his â€Å"I Have a Dream† speech, and his martyrdom. These not only made him the face and leader of the civil rights movement, but arguably the greatest and most influential leader in history. Bibliography King, Martin Luther Jr. â€Å"I’ve Been to the Mountaintop. Speech, Memphis, Tennessee, April 3, 1968. American Rhetoric. http://www. americanrhetoric. com/speeches/mlkivebeentothemountaintop. htm King, Martin Luther Jr. â€Å"Letter From Birmingham Jail. † (letter, Birmingham, Alabama, April 16, 1963. African Studies Center-University of Pennsylvania, http://www. africa. upenn. edu/Articles_Gen/Letter_Birmingham. html [ 1 ]. Martin Luther King Jr. ,  "I’ve Been to the Mountaintop† (speech, Memphis, Tennessee, April 3, 1968), American Rhetoric, http://www. mericanrhetoric. com/speeches/mlkivebeentothemountaintop. htm [ 2 ]. King Jr. , â€Å"I’ve Been to the Mountaintop† (April 3, 1968) [ 3 ]. Martin Luther King Jr. , â€Å"Letter From Birmingham Jail† (letter, Birmingham, Alabama, April 16, 1963), African Studies Center-University of Pennsylvania, http://www. africa. upenn. edu/Articles_Gen/Letter_Birmingham. html [ 4 ]. Martin Luther King Jr. , â€Å"I’ve Been to the Mountaintop† (speech, Memphis, Tennessee, April 3, 1968), American Rhetoric, http://www. americanrhetoric. com/speeches/mlkivebeentothemountaintop. htm

Being religious is not a matter of subscribing to doctrines Essay Example for Free

Being religious is not a matter of subscribing to doctrines Essay In oral/first traditions, being religious entails much more than simply subscribing to a set of doctrines.   It is instead a world view, a way of ordering society, and a means of reckoning with the natural and supernatural.   It deals with the unseen and, in the absence of science, does not create boundaries between natural phenomena and the divine or supernatural.   According to Walter Burkert, â€Å"Religion is manifest in actions and attitudes that do not fulfill immediate practical functions.   What is intended and dealt with cannot be seen, or touched, or worked upon in the usual fashion of everyday life. †Ã‚   (Burkert 5) Being religious is not a matter of subscribing to doctrines (which, in Western societies, is separate from science and other aspects of human life), but is instead a complex relationship with the surrounding natural world and with other humans. views in oral/first traditions often establish the links between a people and the forces controlling their lives.   This is especially true with folklore and creation stories, which attest to the links between a people and their divine beings, as with Io in Maori myths or Bumba in Bushongo myths.   In essence, these attest to the people’s close identification with their divinities and stress a kind of organic belonging important to these societies.   (Novak 334-336)   Also, creation myths bind people closely to the sources of their sustenance, showing their reverence for the natural resources on which they depend.   For example, the Pawnee root their origins firmly in corn, their chief food source, and their divinity (â€Å"Mother Corn†) is female; indeed, many oral/first traditions venerate female deities along with the male, attesting to the biological nature of divinity in oral/first traditions.   (Novak 338-339)   Resources are not simply seen as spiri tually inert commodities, as in Western societies, but as vital parts of a world infused with spirits. Folklore also helps to explain natural phenomena, addressing the â€Å"why?† in order to coherently explain and help people cope with powerful events (again in the absence of science), often natural calamities.   (Burkert 112)   Burkert explains that such tales typically start with some human folly, often a broken taboo or conflict, link these to catastrophes (which are, in these people’s views, manifestations of evil), and explain how they are ultimately overcome.   Chains of human wrongdoing, dreadful consequences, and ultimate resolution, says Burkert, create â€Å"a context of sense and [premise] a meaningful cosmos in which people can live in health and at ease. . . .†Ã‚   (Burkert 128)   Evil is attributed to supernatural agents aroused by human wrongdoing and brings punishment by the gods.   However, resolution does not always occur.   In tales akin to the story of Adam and Eve, whose misdeeds in Eden led to their expulsion from it, both the Ya o of east Africa and the Hopi of North America blame human misbehavior for driving God away from themselves.   (Novak 344-346) World views in oral/first traditions not only involve folklore, but they are also rooted in social hierarchies, since hierarchy serves as a means of ordering the world.   According to Burkert, this is virtually universal in world religions and early societies.   (Burkert 81)   In oral/first traditions, hierarchy involves not only simple subjugation to the powerful, such as humiliation and shows of deference, but also adherence to mutual obligations by superior and inferior alike.   These help create a stable, ordered society in which inferiors show deference to superiors and superiors are obligated to protect or otherwise assist those they dominate.   As Burkert asserts, â€Å"Dominance makes possible forms of solidarity not easily encountered elsewhere. . . .†Ã‚   (Burkert 82)   Hierarchy also manifests in showing reverence for natural forces.   Again, Novak’s examples of the Sioux relationship to the bison and the Pawnee reverence for â€Å"Mother Cornà ¢â‚¬  illustrates how oral/first religions clearly recognize their dependence on certain natural resources for their survival, and their world views often place the sources of their sustenance at the top of their hierarchies. (Novak 338-339, 363-372) Another key behavior in such traditions is reciprocal giving, which Burkert considers vital because it â€Å"regulates the standards of justice . . . [and] is an unexceptionable expectation or even obligation of return.   Every gift demands a counter-gift.†Ã‚   In these societies, an unanswered gift is a serious taboo which violates the obligations inherent in hierarchies.   (Burkert 130)   Creating reciprocal obligations in such religions is a means of promoting peace and stability by strengthening mutual social bonds. Ritual often assumes a central place in oral/first traditions because it â€Å"grows out of anxiety and is designed to control it.†Ã‚   (Burkert 36)   Rituals involve confronting some aspect of fear or pain in order to better cope with it, or to appease unseen forces.   One such common ritual is sacrifice (pars par toto, Latin for â€Å"part for all†), which Burkert calls â€Å"a manageable loss in order to gain salvation.†   The author mentions ancient Greek sacrifices to hail (Burkert 34-37), while others involve bodily mutilations (such as finger sacrifice or severing hands).   Another fact of this is sacrificing scapegoats, usually social outsiders or individuals guilty of violating certain taboos. Scapegoats are sometimes blamed for arousing divine wrath, and their sacrifice is a means of restoring safety to a perilous situation.   He grounds this in biology, likening it to distracting predators by leaving behind an expendable part, like foxes gnawing off their paws to escape hunters’ traps.   (Burkert 41)   Similarly, Burkert considers ritual castration a means of defying biology: â€Å"The illusion is that by renouncing procreation men may stay clear of the maelstrom of life and death.†Ã‚   (Burkert 48)   It is also a biological means of enforcing hierarchy, as seen with lower primates A less brutal aspect of this is the sacrificial feast (eating certain venerated foods) and ritualized killing of certain animals (intended to show the being reverence, as with the bison).   Life, according to Burkert, is â€Å"a transient stability depending upon the ‘just’ exchange† (Burkert 155), and showing respect for life-sustaining forces assumes crucial importance.   Another aspect of ritual is the oath, in which words are set in a ceremonial context in order to make them sacred and inviolate.   (Burkert 171-173) Another aspect of behavior in this milieu is the importance of signs, which help divine some aspect of the future, usually through the role of the shaman.   Shamans, who often attain their status through ceremonies or rituals, are basically the mediators between the natural and supernatural, capable of reaching an ecstatic state which gives them divine insights and lets them cross the boundaries that other members of these societies cannot.   An example is the Eskimo shaman, whom Novak claims can achieve a â€Å"fit of mysterious and overwhelming delight† (Novak 355).   In this state, they may see signs by watching people’s behaviors, the weather, objects, and other phenomena in which the future may be divined. These signs basically comprise a kind of unwritten language for interpreting the world, and the shaman acts as a designated translator.   Other signs not limited to the shaman include body markings, such as scars, brands, tattoos, and tooth alteration, which set certain people apart and are not simply arbitrary choices or fashions.   These function as a language (often in the absence of a written language) with deep significance for those who embrace it.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Despite the commonalities one finds among early traditions, such as bonds to the natural world, the presence of shamans, and the importance of hierarchy and mutual obligation, conversion does not appear to be a matter one could take lightly.   In these societies, religion is not simply a set of doctrines which can be substituted for another, but a complex system of relationships to a specific group of people, physical environment, and body of folklore.   They are not rationalized as commonalities between cultures, since people in these societies seldom transplanted themselves lightly from one cultural cosmos to another.   For example, while first traditions all share similar creation stories, the nuances and elements of each will differ from one another, as will the rituals and signs associated with their religions.   Changing entire world views appears not to be a frivolous decision, since the world views in oral/first traditions are so intricate.

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