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Other benefits include payouts or large severance packages should an executive leave a corporation, whether or not they fulfilled the terms of their initial contract (Griner, 1996). There has been some criticism of late of agencies and organizations that offer compensatory packages for CEOS that do not meet organizational objectives. Employees in many instances are not afforded the same benefits or exemptions that executives are. Most employees are likely to be fired or laid off without any benefit or pay out particularly when their performance is considered marginal. This is not always the case however with executive pay.
Change on the Horizon
One of the biggest challenges that lies ahead for HR managers and organizations will be holding executives accountable for the results they produce within an organization. Boards must more and more take a "rigorous approach to ensure that pay reflects performance" so that stakeholders can measure executive contributions to the organization, to its growth, market share and human capital (Chingos, 2004). Executive pay should also be more closely scrutinized to ensure the gender inequalities evaporate in the coming years.
At this time there is no justification for the pay gap that currently exists with regard to male and female executive representatives. Though some gender related wage gaps still exist among traditional employees, the gap is still far more apparent and large among organizational executives. HR representatives...
This combined with new federal legislation may help mitigate the problems that currently exist within the realm of executive pay. At the very least such actions will bring more attention to the inequities that currently exist with regard to executive compensation.
References
Bowlin, W.F., Renner, C. & Rives, J.M. (2002). "The significance of gender in explaining senior executive pay variations: An exploratory study." Journal of Managerial Issues, 14(3): 331
Chingos, P. (2004). "Perspective: Responsible executive compensation" Mercer Human
Resources. Retrieved May
20, 2005: http://www.mercerhr.com/referencecontent.jhtml?idContent=1126240.
Finance Magazine. Retrieved May 20, 2005: http://www.businessfinancemag.com/magazine/archives/article.html?articleID=14221&TF=Y
Corporate executive pay needs to be reconsidered. Proponents of corporate greed will claim all sorts of outlandish reasons why their mansion on the Riviera is benefitting the worker making $7 per hour in the fields. Companies will even use spurious research methods to justify corporate executive pay. The Institute for Policy Studies and the Center for Corporate Policy (2007) notes that "amounts for restricted stock, pension benefits, deferred compensation, and
In order to compare the executive compensation in both countries, the countries firms should be matched and compared according to industry, size and operation. The executive compensation can be measured or compared accurately according to the industry and firms sizes. From the data, it was found that the executive compensation in both countries were high whereas the firm performance was reducing. The data collection for the executive compensation in
Part of the reason for this, is because shareholders and the board of directors are allowing this to occur. To prevent the situation from becoming worse, shareholders and the board need to be more independent, by questioning the motives / actions of management. At the same time, there must be some kind regulations in place that can prevent the runaway abuses from occurring. If this kind of strategy can
It has been shown that the acquisition of talent not an area specific to each individual position at top companies. The highest-performing companies build pools of talent from which they can draw as needed (Michaels et al., 2001). Thus, there will inevitably be talented people who are at times underutilized. Their higher-order needs are not being met and thus they must be generously compensated. Otherwise, when the time comes
Executive Compensation Programs and Incentives In 1996 the average salary plus bonus for CEOs was $2.3 million. After other benefits were added, this sum rose to $5,781,300. Beginning with Revlon executive Michael Bergerac who broke the $1 million mark in 1974, executive pay and bonus plans have soared to mind-boggling proportions. Although various governmental agencies have set limits on tax-deductible executive compensation, these efforts not only failed but served to raise
Those days are likely over, for a variety of reasons, including shareholder concerns about the ever increasing dilution due to the issuance of options and new accounting rules requiring companies to expense options... In addition, studies have shown that the accounting cost of stock options exceeds employees' perceived value of those options. Finally, there has been a crisis in governance that has caused a reexamination of corporate accounting standards.