How Do Chairmen and Members of the Board get paid?

Answer 1

First they get a paycheck just like any other employee. Second most companies require them to hold stock in the company and thus they would get the dividends from their stock.

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Answer 2

This is negotiable between the shareholders and board itself. There is nuance depending on whether the company is public or private, but in general the board represents the owners (shareholders) while the CEO represents the managenent team.

Answer 3

They get a salary from the corporation, usually.

Answer 4

A corporation is an artificial legal entity (technically, a juristic person) which, while made up of a number of natural persons or other legal entities, has a separate legal identity from them. As a legal entity the corporation receives legal rights and duties. Five rights always exist for a corporation: the ability to sue and be sued (this gives the corporation access to the courts); the right to a common treasury (this gives the right to hold assets separate from the assets of its members); the right to hire agents (this gives the corporation the right to hire employees); the right to a common seal (this gives the corporation the right to sign contracts); and the right to make by-laws (this gives the corporation the right to govern its internal affairs). Governments and courts may add other rights and duties. These will vary from jurisdiction to jurisdiction. The granting of additional rights to corporations is often very controversial.

Stewart Kyd, the author of the first treatise on corporate law in English, defined a corporation as "a collection of many individuals united into one body, under a special denomination, having perpetual succession under an artificial form, and vested by the policy of the law with the capacity of acting in several respects as an individual, ...".

One type of corporation is presently dominant --- the modern business corporation. In addition to legal personality, the modern business corporation has three other legal characteristics: transferrable shares (the membership can change without affecting the existence of the corporation as a legal entity), the capacity for perpetual succession (the possibilty that the corporation can continue to exist despite the withdrawal of any of its members), and limited liability (the responsibility of the members for the debts of the corporation is limited). The members of the modern business corporation are the shareholders.

The prevalence of the modern business corporation often obscures the fact that other forms of corporations exist and did exist for many years before the emergence of the modern business corporation. Investors and entrepreneurs often form joint stock companies and incorporate them to facilitate a business; as this form of business is now extremely prevalent, the term corporation is often used to refer specifically to such business corporations. Corporations may also be formed for local government (municipal corporation), political, religious, and charitable purposes (not-for-profit corporation), or government programs (government-owned corporation). As a generic legal term, corporation refers to any group which has legal personality. Historically the modern business corporation emerges with the blending of the traditional corporation with the joint-stock company.

Humans and other legal entities composed of humans (such as trusts and other corporations) can have the right to vote or share in the profit of corporations. In the case of for-profit corporations, these voters hold shares of stock as proof of ownership of the corporation, and are thus called shareholders or stockholders. When no stockholders exist, a corporation may exist as a non-stock corporation, and instead of having stockholders, the corporation has members who have the right to vote on its operations. If the non-stock corporation is not operated for profit, it is called a not-for-profit corporation. In either category, the corporation comprises a collective of individuals with a distinct legal status and with special privileges not provided to ordinary unincorporated businesses, to voluntary associations, or to groups of individuals.

For the purposes of the next few paragraphs, the term "members" will be used to refer to stockholders of a stock corporation and members of a non-stock corporation.

Typically, a board of directors governs a corporation on the behalf of the members. The corporate members elect the directors, and the board has a fiduciary duty to look after the interests of the corporation. The corporate officers such as the CEO, president, treasurer, and other titled officers are usually chosen by the board to manage the affairs of the corporation.

Corporations can also be controlled (in part) by creditors such as banks. In return for lending money to the corporation, creditors can demand a controlling interest analogous to that of a member, including one or more seats on the board of directors. Creditors are not said to "own" the corporation as members do, but can outweigh the members in practice, especially if the corporation is experiencing financial difficulties and cannot survive without credit.

Members of a corporation (except for non-profit corporations) are said to have a "residual interest." Should the corporation end its existence, the members are the last to receive its assets, following creditors and others with interests in the corporation. This can make investment in a corporation risky; however, the risk is outweighed by the corporation's limited liability, which ensures that the members will only be liable for the amount they contributed. This only applies in the case of for-profit corporations; non-profits are not allowed to have residual benefits available to the members.

For-profit and non-profit
Main article: non-profit organisation
In modern economic systems, conventions of corporate governance commonly appear in a wide variety of business and non-profit activities. Though the laws governing these creatures of statute often differ, the courts often interpret provisions of the law that apply to profit-making enterprises in the same manner (or in a similar manner) when applying principles to non-profit organisations — as the underlying structures of these two types of entity often resemble each other.


[edit] Closely held and public
The institution most often referenced by the word "corporation" is a public or publicly traded corporation, the shares of which are traded on a public market (e.g., the New York Stock Exchange or Nasdaq) designed specifically for the buying and selling of shares of stock of corporations by and to the general public. Most of the largest businesses in the world are publicly traded corporations. However, the majority of corporations are said to be closely held, privately held or close corporations, meaning that no ready market exists for the trading of ownership interests. Many such corporations are owned and managed by a small group of businesspeople or companies, although the size of such a corporation can be as vast as the largest public corporations.

Closely held corporations have a few advantages over publicly traded corporations. A small, closely held company can often make company changing decisions much more rapidly then a publicly traded company. A publicly traded company is also at the mercy of the market, having capital flow in and out based not only one what the company is doing but the market and even what the competitors are up too. Publicly traded companies also have advantages over their closely held counterparts. Publicly traded companies often have more working capital and can delegate debt though out all share holders. This means that people invested in a publicly traded company will each take a much smaller hit to their own capital as opposed to those involved with a closely held corporation. Publicly traded companies though suffer from this exact advantage. A small corporation can often voluntarily take a hit to profit with little to no repercussions (as long as it is not a sustained loss). A publicly traded company though often comes under extreme scrutiny if profit and growth are not evident to stock holders, thus stock holders may sell, further damaging the company. Often times this blow is enough to make a small public company fail.

Often times communities benefit from a closely held company more so then from a public company. A closely held company is far more likely to stay in a single place that has treated them well, even if going through hard times. The owners can incur some of the damage the company may receive from a bad year or slow period in the company profits. Workers benefit in that closely held companies often have a better relationship with workers. In larger, publicly traded companies, often when a year has gone badly the first area to feel the effects are the work force with lay offs or worker hours, wages or benefits being cut. Again, in a closely held business the owners can incur this profit damage rather then passing it to the workers. Closely held businesses are also often known to be more socially responsible than publicly traded companies.

The affairs of publicly traded and closely held corporations are similar in many respects. The main difference in most countries is that publicly traded corporations have the burden of complying with additional securities laws, which (especially in the U.S.) may require additional periodic disclosure (with more stringent requirements), stricter corporate governance standards, and additional procedural obligations in connection with major corporate transactions (e.g. mergers) or events (e.g. elections of directors).


[edit] Mutual Benefit Corporations
A mutual benefit nonprofit corporation is formed solely for the benefit of its members. An example of a mutual benefit nonprofit corporation is a golf club. Individuals pay to join the club, memberships may be bought and sold, and any property owned by the club is distributed to its members if the club dissolves. The club can decide, in its corporate bylaws, how many members to have, and who can be a member. Generally, while it is a nonprofit corporation, a mutual benefit corporation is not a charity. Because it is not a charity, a mutual benefit nonprofit corporation cannot obtain 501(c)(3) status. If there is a dispute as to how a mutual benefit nonprofit corporation is being operated, it is up to the members to resolve the dispute since the corporation exists to solely serve the needs of its membership and not the general public.[6]


[edit] Multinational corporations
Main article: Multinational corporation
Following on the success of the corporate model at a national level, many corporations have become transnational or multinational corporations: growing beyond national boundaries to attain sometimes remarkable positions of power and influence in the process of globalizing.

The typical "transnational" or "multinational" may fit into a web of overlapping ownerships and directorships, with multiple branches and lines in different regions, many such sub-groupings comprising corporations in their own right. Growth by expansion may favour national or regional branches; growth by acquisition or merger can result in a plethora of groupings scattered around and/or spanning the globe, with structures and names which do not always make clear the structures of ownership and interaction.

In the spread of corporations across multiple continents, the importance of corporate culture has grown as a unifying factor and a counterweight to local national sensibilities and cultural awareness.

In the case of companies and similarly-organised bodies, there are generally two types of Chairman: non-executive and executive.

A non-executive Chairman is a part-time officeholder who sits on and chairs the main board of a company, and also usually provides support and advice to a Chief Executive Officer (CEO). This position usually entails fulfilling a similar function on a number of ancillary board committees, as well as being a political figurehead of the Company.

An executive Chairman is a full-time officeholder who typically leads the board and also takes a hands-on role in the company's day-to-day management.