2 Discussions and 1 Journal article in APA format

Part 1

There are definitely a few examples of managers who have put forward their personal motives into precedence even when the company was in a state of crisis financially. To name a few of them:

Bob Nardelli

Bob Nardelli was the CEO of Home Depot until he stepped down in 2007, when he had accumulated $223 million. Though the stock process of the company didn’t rise in the year 2006, Nardelli’s compensation for sure had shoot up to $131 million. When he was asked to align his pay with the interests of the company and it’s profits, he refused to do so and decided to step down after closing the deal with $100 million. This clearly is a case which demonstrates that though managers try hard to increase the performance of a company, failing to do so they tilt their gear towards enhancing their compensation.

Jack Welch

Jack Welch was the CEO of General Electric. In his role, he received great perks like an apartment in Manhattan which was owned by the company and had a rental price of $80000/month. He was also offered the box seats and the courtside seats of many extremely famous game tournaments like the U.S open, Wimbledon, Yankees, etc. During his retirement in 2001, his severance pay was marked at $417 million. This amount was the highest amount given during retirement to any American CEO in the last ten years.

There are two methods a company can employ to align the interests of the management and the stockholders. Those tools are Threat of firing and Managerial compensation. Satisfaction and happiness of the stockholders is of primary importance. When this is not taken care of, they have the power to push the board to replace the management of the company or they could even elect a company new set of board of directors that could perform according to their interests. When reward system in the management level of a company is strong it helps in retaining skilled managers. It also helps in driving them towards achieving the goals set by the stockholders. This usually is done annually during the performance review in the form of bonuses or they are awarded with company shares. They sometimes are also giving stock options which allow them to see through the eyes of stockholders.

Part 2:

It is financially extremely vital to own a certain amount of money and make sure to start rotating it as early as possible as the retrieving power of it keeps diminishing as times passes. The current value of money is what matters the most as it might or might not have the same value later. This is the main idea behind the time value of money. It is also important to know the possible limit that it might have in terms of security. Only when this is acknowledged one can reap the most out of it, Many strategies and formulations are used to generate more money over a period of time by either going with investment options or stock market or leasing costs.

The future value of money is nothing but the worth a certain set of amounts will have much later. This is calculated using a ton of tools and methodologies and applying them over various periods of time. This is essential if one wants to make the right decisions and drive towards profits in the future.

References

Bozhya-Volya, R., & Rybak, A. (2019). Why Should Money Lose Value with Time: Boosting Economy in the Era of e-Money. SSRN Electronic Journal. doi: 10.2139/ssrn.3318162

Cobb, J. A. (2019). Managing the Conflicting Interests of Workers and Shareholders: Evidence from Pension-Assumption Manipulations. ILR Review, 72(3), 523–551.  https://doi.org/10.1177/0019793918789155