Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
CEO Compensation
Despite Crystal's criticisms of executives earning outrageous sums of money that are not linked to their performance, the reality is that most executives have a compensation package that is based on performance in some way or another (Codon and Lynch, 2004). However, the use of stock options and other equity-based incentives create enormous incentives to manage the performance of companies for short-term stock price gain. This often comes at the expense of strategy implementation that could sacrifice profits in the short-term for long-term benefits. Also, underlying executive actions there may be the desire for personal wealth, not the strength of the corporation obtained through a well thought out strategic plan.
Of the recommendations offered in the case, the two that are the most promising are linking pay to long-term profitability and putting workers on the boards of directors. Instead of being pressured to make quarterly and annual profits, incentives based on long-term profitability free CEO's to focus on the company's future. Management should also restore the relationship between wages and profitability by sharing the wealth through all levels of the organization (Glassner, 2002). Putting workers on the board is one way to make sure that if the rank-and-file has to make financial sacrifices, so should the company management. In turn, when the company experiences...
Board participation by bankers and stockholders may actually increase the focus on short-term profitability because they have often have short-term financial incentives themselves. If companies expense options at the time they are granted, it will be difficult to continue to grant options to as many employees, leaving CEO's the most likely candidates for shares that can be granted. Disallowing tax deductions for CEOs with pay that is 25 times higher than the average for blue-collar workers would affect small companies more than larger ones and does nothing to align executive behavior with the best interest of the company. Internal pooling isn't always the best option for CEO replacement and doesn't necessary ensure that the successor will have the proper incentives, even if the overall compensation package is lower.
3. Shareholders, employees and the general public are all placing increased pressure on boards of directors and compensation committees to appropriately review the compensation paid to executives and how the package encourages them to behave. In particular, there has been increasing shareholder concern over the dilution caused by…
Bibliography
Codon, D. And Lynch, D. (2004, January). Recent developments in executive compensation. The Corporate Compliance and Regulatory Newsletter, Vol 1. No. 5. Retrieved June 26, 2005 from Web site: http://www.rkmc.com/pdf/exec_compensation.pdf
Glassner, F. (2002, March 6). Who is to blame for outrageous executive pay? One less Barbie dream house won't hurt anyone. HRM Guide. Retrieved June 26, 2005 from Web site: http://www.hrmguide.net/usa/rewards/rewarding_performance.htm
seemingly outrageous salaries of many CEOs have sparked a great deal of debate. As CEO salaries reach 532 times that of the average worker, many people note that these exorbitant salaries seem to have little impact on CEO performance. In addition, high CEO salaries are morally suspect, as they are often decided by powerful figures, and reflect a clear economic and social division in a country that is founded
CEO's salary, bonus, and long-term compensation with respect to various organizational, financial and CEO factors such as corporate reputation, growth in employees, company size, and return on equity, CEO tenure and CEO stock ownership. In relation to the general performance of the organization This paper utilizes the various measurement of chief executive compensation as exploited by the various detailed pieces of literature and employed as the dependent variable in a
CEO Compensation The author of this report is asked to answer a few questions and create a tool relating to chief executive officer (CEO) compensation. Of course, there are some traditional trends and factors that usually inform and help calculate what the pay for a CEO shall be. However, there are some people that are clearly outliers to this and some of these anomalous amounts and/or their overall disproportionality to the
3. Does public awareness of the CEO's salary influence the branding of an organization? How? Give two examples, one negative and another positive. It is perfectly understandable that public awareness of CEO salaries play a role in establishing corresponding attitudes toward the corporate Brand. Where corporations demonstrate socially responsible concern and altruism in the manner exhibited by corporate executives like Bill Gates of Microsoft and Ted Turner, or incorporated within the
Verizon Compensation Strategy Compensation Practice Verizon Communications is a publicly traded company registered in the United States as a telecommunications and broadband company. It trades under the name Verizon. It is a market leader in the telecommunications industry and strives to provide excellent services that satisfy consumers. Worker compensation has always been an important aspect of Verizon's overall strategy to keep employees motivated and provide excellent service to consumers. In 2010, the
compensation strategies companies. For company selected, discuss a 350-word synopsis: • Evaluate compensation strategies executives company. • Evaluate compensation strategies sales forces contingent workers company.ID Compensation strategies for two companies Whole Foods Whole Foods, the organic grocery retailer, is one of the few companies that has actually reported garnering positive press as a result of its executive compensation policy. Whole Foods ' "caps the chief executive's salary and bonus at 14 times