INSCAE

Corporate
Accounting
Executives
Compensation
 EXECUTIVES KIND OF SALARY ???
Case of CEO’s Compensation in United States
Source: Economic Policy Institute. 2011. Based on data from
PROFIT DISTRIBUTION/ WAGES / SALARY
Wall Street Journal/Mercer,
PROFIT DISTRIBUTION Hay Group 2010.
WAGES

Employees
Owners Owners
representative
 Executives pay
•Base salary
•Incentive pay, with a short-term focus, usually in the form of a bonus
•Incentive pay, with a long-term focus, usually in some combination of
stock awards, option awards, non-equity incentive plan compensation
•Enhanced benefits package that usually includes a Supplemental
Executive Retirement Plan (SERP)
•Extra benefits and perquisites, such as cars and club memberships
•Deferred compensation earnings
05 Highest payd CEO
Source : Kathleen Elkins – May 2018
 CEO COMPANY 2016 ($ million) 2017 ($ million)
Stephen Kaufer TripAdvisor 01,20 47,90
Jeff Bewkes Time Warner 32,60 49,00
W. Nicholas Howley TransDigm 18,90 61,00
Leslie Moonves CBS 69,60 69,30
Hock Tan Broadcom 24,70 103,20
• TripAdvisor, Inc. is an American travel and restaurant website company
that shows hotel and restaurant reviews, accommodation bookings
Warner Media, LLC, doing business as WarnerMedia, is an American multinational mass media
and entertainment conglomerate owned by AT&T and headquartered in New York City. The
company has film, television, cable networks, and publishing operations.
• TransDigm Group Inc. is a leading global producer, designer and supplier
of engineered aerospace components, systems and subsystems.
• CBS Corporation (NYSE: CBS.A and CBS) is a mass media company that
creates and distributes industry-leading content across a variety of
platforms (conglomerate américain de media)
Broadcom Inc : is a global technology leader that designs, develops and supplies
semiconductor and infrastructure software solutions (Industrie électronique).
 Are there normal wages or
profit distribution ?
For those people who are at the
same time owners and
employees of the company !!!
https://www.youtube.com/watch?v=eAo3UfsNgbg
 PCG 2005
• ACCOUNTING CONVENTION : BUSINESS ENTITY
• SEPARATION BETWEEN WAGES AND PROFIT DISTRIBUTION
• SEPARATED ACCOUNT FOR WAGES AND FOR PROFIT
DISTRIBUTION
 MANAGEMENT COMPENSATION REMUNERATION DES
DIRIGEANTS

S S
A A SNC
Partn
R
L L
t L
d i
a
b
 MANAGEMENT COMPENSATION
LIMITED COMPANY REMUNERATION -
SA

• WAGES (APPOINTEMEMTS EFFECTIFS)

• ATTENDANCE FEES OR ATTENDANCE TOKEN (JETONS
DE PRESENCE)
 WAGES
WAGES OF THE CHAIRMAN, BOARD MEMBERS WHO
ARE EXECUTIVES IN THE COMPANY (fonction de
direction, PDG, DG – Clear employment contract)
644 XXX (Gross salary)
431 XXX (employee social contribution for CNaPS)
432 XXX (employee social contribution for OSTIE)
44X XXX (income tax)
425 XXX (salary advances)
421 XXX (employee acc payable – net salary)
(WAGES)
 WAGES – Employer social contribution
645 XXX
431 XXX (Employer social contribution for Cnaps)
432 XXX (Employer social contribution for OSTIE)
(Employer contribution)
 WAGES
421 XXX (net salary)
431 XXX (cnaps)
432 XXX (ostie)
512/53 XXX
(PAYMENT)
 ATTENDANCE FEES (JETONS
PRESENCE)
Payment assigned to the members of the board attending for the Board
meeting (Membres du Conseil d’Administration)

653 Attendance fees expensesXXX

455 shareholder current account XXX
(attendance fees )
 EXECUTIVES
COMPENSATION LIMITED
LIABILITY COMPANY (SARL)
• Executives holding the majority of shares (+ 50% of share capital/Voting
power)
• Executives holding the minority of shares (- or = 50% of share
capital/Voting power)
• Others jurisdiction aspects have to be considered :
• Power on Finance and Operations
• Power to appoint or to revoke the majority of Board Members
 Compensation of Executives holding the
Minority of power

644 XXX (GROSS SALARY)

431XXX (CNAPS)
432XXX (OSTIE)
44X XXX (INCOME TAX)
425XXX (ADVANCES)
421XXX (NET SALARY)
(Monthly Wages )
 Compensation of Executives holding the
Minority of power
645 XXX (Employer contributions)
431 XXX (CNAPS)
432 XXX (OSTIE)
(Employer monthly contribution)
 Compensation of Managing Director holding
the Minority of power

421 XXX (net salary)

431 XXX (cnaps)
432 XXX (ostie)
512/53 XXX
(PAYMENT)
 Executives Holding the majority of power
455 XXX (net of income tax payment)
512/53 XXX (net of income tax payment)
(Payment occurring during the year)

12 /63X XXX (income tax)

444 XXX (income tax)
(Tax on dividend)
 Executives Holding the majority of power

12 XXX
455 XXX
(End of the year - Regularization)
 Executives Compensation within partnership
(SNC)
Compensation = Distribution of Dividend
455 XXX
512/53 XXX
(Payments occurring the year)

12 XXX
444XXX
(Tax on dividend )
 At the end of the year
• 12xxx xxxx
455xxx XXX
(regularization)
Management
compensation
 EXERCISE 1
• VOKATRA is a limited liability company with MGA de 45 000
000 share capital (3000 shares for MGA nominal value of
15000 each). The shareholders are : Rabe (1600 shares), Rakoto
(700 shares), Rasoa (700 shares)
• The General Manager receive monthly MGA 19 000 000 Gross
salary
• It was planned that each shareholder will take over as the
General Manager each year.
• The first year is the turn of Rakoto, the second year is the turn of
Rabe and the third year is the turn of Rasoa.
• Work to be done : Recording of the annual executive’s pay in
the bookkeeping of the company VOKATRA
 EXERCISE 2
• The limited liability company MEVA is constituted by 04
partners : Randria (2000 shares), Radona the general manager
(4000 shares), Ravao (500 shares), Randrema (300 shares)
• February, 15th 2016: Radona withdraws money from the bank
MGA 3 600 000 in order to pay his salary,
• April, 02nd 2016 : Randria lends MGA 1 500 000 to the
company to purchase some fournitures,
• July, 1st 2016 : Ravao and Randrema lend each MGA 800 000
to company to replenish the petty cash,
• Work to be done : Recording of the operations within the
bookkeeping of MEVA