What is ‘Fat Cat’
A slang word used to describe executives who earn what many believe to be unreasonably high salaries and bonuses. These top executives also receive generous pensions and retirement packages, consisting of extra compensation not available to other company employees.
Explaining ‘Fat Cat’
This term conjures up the image of cats that consume more than an appropriate amount of food and become grossly overweight.
Publicly-traded companies are required to disclose the amount of compensation that their top five executives receive. As a result, companies have been under a lot of scrutiny for excessive executive compensation, especially in the face of floundering revenues.
A real-life example of a fat cat would be former Disney CEO, Michael Eisner. For a period of five years in the late 1990s, Eisner received over $737 million in compensation, despite the fact that the company’s five-year net income shrank an average of 3.1% each year.
Further Reading
- Chief executive compensation: An empirical study of fat cat CEOs – papers.ssrn.com [PDF]
- Organisational form and individual motivation: public ownership, privatisation and fat cats – www.tandfonline.com [PDF]
- Monitoring directors' remuneration, fat cat packages and perks of office – www.emerald.com [PDF]
- The Performance of Fat Cat Portfolios with Companies Announced by the TWSE and the TPEx: A Stochastic Dominance Analysis – www.airitilibrary.com [PDF]
- Does the board of directors as Fat Cats exert more earnings management? Evidence from Benford's law – www.sciencedirect.com [PDF]
- Determinants of Directors' Pay in Switzerland:'Optimal-Contract'versus' Fat Cat'Explanation – papers.ssrn.com [PDF]
- Implications of Western “Fat Cat” Phenomenon for Corporate Governance in Chinese Companies [J] – en.cnki.com.cn [PDF]
- Executive compensation, fat cats, and best athletes – journals.sagepub.com [PDF]
- Of Fat Cats and Fat Tails: From the Financial Crisis to the 'New'Probabilistic Marxism – www.emerald.com [PDF]
