Financial Fraud

LUCKNOW—In the realm of corporate governance, executive compensation has become a battleground between shareholder interests and executive enrichment. While performance-based compensation is intended to align executive interests with those of shareholders, it can also be manipulated to enrich executives at the expense of the company. The Institute of Internal Auditors (IIA) reports that excessive executive compensation can be a symptom of deeper governance issues and can lead to ethical lapses.These schemes can involve inflated salaries, excessive bonuses, and lavish perks, often without a clear link to performance. Backdating stock options, manipulating performance metrics, and using corporate funds for personal expenses are just some of the tactics employed by executives to enrich themselves.Strong corporate governance, including independent board oversight and robust internal controls, is crucial in preventing excessive executive compensation. Shareholder activism and regulatory scrutiny are also playing an increasingly important role in ensuring that executive compensation is aligned with company performance and shareholder interests."Executive compensation must be transparent, fair, and linked to measurable performance, robust governance mechanisms and shareholder oversight are essential to ensure that executive compensation practices do not undermine shareholder value."As the debate over executive compensation continues, the focus remains on ensuring that these practices are fair, ethical, and aligned with the long-term interests of the company and its shareholders.