Executive compensation: the role of Shari'a compliance
AbstractPurpose – The purpose of this paper is to illuminate issues surrounding executive compensation as it relates to current understandings of Islamic business law. Design/methodology/approach – The emerging bodies of literature in the fields of executive compensation and opinions of stock options under Shari'a law are reviewed. Findings – It appears that the trend in offering employee stock options as part of a Shari'a compliant compensation package is acceptable in most cases, yet because of its close association with the more problematic idea of derivative transactions, the company must be vigilant in obtaining the approval from its Shari'a Standards Board before offering it as part of an overall compensation package. Research limitations/implications – Existing quantitative data in this area are limited. Given the qualitative, exploratory nature of the design, generalizability is not as robust as other designs. Practical implications – The paper makes recommendations about the inclusion of employee stock options as part of a Shari'a compliant executive compensation package. Originality/value – This paper advances the extant literature on the ethics of executive compensation in general as well as adding to the extant literature on Shari'a compliance of executive compensation packages.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Emerald Group Publishing in its journal International Journal of Islamic and Middle Eastern Finance and Management.
Volume (Year): 4 (2011)
Issue (Month): 3 (August)
Contact details of provider:
Web page: http://www.emeraldinsight.com
Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Morgan, Angela & Poulsen, Annette & Wolf, Jack, 2006. "The evolution of shareholder voting for executive compensation schemes," Journal of Corporate Finance, Elsevier, vol. 12(4), pages 715-737, September.
- JAMES J. ANGEL & DOUGLAS M. McCABE, . "Market-Adjusted Options For Executive Compensation," Working Papers _001, Georgetown School of Business.
- James Angel & Douglas McCabe, 2008. "The Ethics of Managerial Compensation: The Case of Executive Stock Options," Journal of Business Ethics, Springer, vol. 78(1), pages 225-235, March.
- Baker, G.P. & Jensen, M.C. & Murphy, K.J., 1988.
"Compensation And Incentives: Practice Vs. Theory,"
88-05, Rochester, Business - Managerial Economics Research Center.
- Lucian Bebchuk & Yaniv Grinstein, 2005.
"The Growth of Executive Pay,"
NBER Working Papers
11443, National Bureau of Economic Research, Inc.
- Brian J. Hall & Kevin J. Murphy, 2003. "The Trouble with Stock Options," NBER Working Papers 9784, National Bureau of Economic Research, Inc.
- Festing, Marion & Eidems, Judith & Royer, Susanne, 2007. "Strategic Issues and Local Constraints in Transnational Compensation Strategies:: An Analysis of Cultural, Institutional and Political Influences," European Management Journal, Elsevier, vol. 25(2), pages 118-131, April.
- Brian J. Hall & Kevin J. Murphy, 2003. "The Trouble with Stock Options," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 49-70, Summer.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Louise Lister).
If references are entirely missing, you can add them using this form.