Impact Of The Sarbanes-Oxley Act

502 Words3 Pages
The Sarbanes-Oxley Act made several changes that impact executive compensation arrangements. The act includes new restrictions and requirements for executive compensation. It requires faster disclosure when certain owners and executives buy or sell company stock. Most personal loans from the company to directors and executive officers are banned. In addition, chief executive officers and chief financial officers must return their bonuses and other incentive compensation if the company has to restate its earnings. The Sarbanes Oxley Act is a change that will restrict or eliminate longstanding executive compensation practices. A recent example of executive compensation is in an article from CNNMoney.com concerning Hugh Grant, the chairman and CEO of Monsanto…show more content…
On the other hand, as a student, this compensation seems excessive. Grant did not receive his compensation for doing nothing. “In the year ending Aug. 31, the St. Louis-based company said it earned $993 million on sales of $8.56 billion, up from a profit of $689 million on sales of $7.39 billion during the previous year. Grant told investors that the year was a benchmark for the company, as more of the world's farmers purchased Monsanto products. The company's growth led the board of directors to expand the group of companies it uses to gauge the adequacy of its executive compensation and said it increased Grant's annual salary 18 percent to $1.36 million for 2008.” Although Grant “earned” is compensation by leading the company to an increase in sales, I am not sure if his executive compensation was equal to the job he did. I think the restrictions on executive compensation by the Sarbanes Oxley act on executive compensation are fair, but if I am ever in a position of receiving executive compensation I may have a different

More about Impact Of The Sarbanes-Oxley Act

Open Document