Background: A debated subject in today’s society is CEO compensation. Companies which give the CEO compensation mean that it motivates them to maximize the company’s return. The compensations are based on various types of variables, such as financial measures and financial ratio. Despite the various reasons given by the company as to why high compensations are paid out and what it is based on, the Media, shareholders and other privies have questioned this phenomenon. This is because most of the companies that use this type of compensation system show a financial downturn and negative financial ratio. Purpose: The purpose with this thesis is by evaluating annual report’s examining the relation between bonus compensations and company size. Also, to revise if there is a relation between profitability and dividends of the CEO compensation for the companies that has the aim for compensation. Method: This thesis is based on a quantitative study where the empiric consists of secondary data collected from annual reports for companies listed on the stock exchange. Empirical: The empirical data is presented in tables and graphs. The result shows that some companies give compensation despite negative financial ratio. Conclusion: The study shows that companies that are most prone to the compensation payout to the CEO are mostly larger companies, their numbers regarding compensation exceeds substantially the dividends shown in the medium-sized businesses. The study also shows that the relationship between compensation and profitability varies between the companies which are analyzed in the study. It has been difficult to draw a clear parallel between profitability and dividends, since the majority of the companies have negative financial ratio but have a dividend that can be compared to companies that have profitable numbers.

Background: The background explains different financial crises and the effect those crises had on the Swedish acquits regarding variable compensation. The resent discussion regarding variable compensation and the main problems with bonuses is also explained. Our theories for this essay is mainly based on the new directions from Finansinspektionen FFFS 2009:6,7 and stakeholder theory. Other theories used are agency theory, stewardship theory and economic man.Purpose: The purpose of this essay is to analyze the new directions for variable compensation and to investigate if these new directions can lead to a more long-term thinking for managers in banks. Method:We used semi-structured interviews with open questions for our survey. During the survey we conducted three personal interviews and one mail interview, respondents represented the stakeholder groups: stakeholder, stakewatcher and stakekeeper. Conclusion: During our survey we found that the directions from Finansinspektionen are still on an early stage and it has been hard to analyze their effects. But it has been shown that the banks experience some difficulty in identifying their risk takers. In our investigation we have found that the new directions can be a step towards a more long-term thinking but it requires the management to change the point of view regarding bonuses.