Compensation strategies for executives, sales forces, and contingent workers

¶ … 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 the average worker's pay" (Clark 2006). This is intended to reinforce the team-based leadership and performance reviews that structure the company's leadership within its stores throughout the nation. However, it has been noted that Whole Foods is not quite as democratic in reality as its written policy might suggest. CEO John Mackey made $1.8 million exercising his stock options, far more than his official salary of $436,000 (Clark 2006). However, his overall compensation is still relatively low, compared to other CEOs of his caliber.

Apple

CEO and founder of Apple Steve Jobs was another CEO that famously used his low salary as a selling point to distinguish himself against competitor organizations with bloated executive compensation packages. Jobs received a dollar a year as his salary from Apple. He was still a wealthy man "because he already held a big position in Apple's stock, thanks to an option grant when he returned to the company at the end of the 1990s. Steve's original option grant had exploded in value thanks to Apple's amazing renaissance, so by last year it was worth several billion dollars" (Blodget 2012).

Apple's new CEO now receives an annual salary of $378 million, "comprised of $900,000 of cash salary and a $377 million stock grant" (Blodget 2012). This was presumably seen as necessary to compensate a man on the stature of CEO Tim Cook's competence for the tremendous stresses to excel as head of the company Jobs founded. "It was awarded, presumably, to create an incentive for him to do an excellent job over many years -- hopefully, a decade or more" (Blodget 2012).

Apple has famously been a rather unpleasant place to work for ordinary-level managers. Relatively meager benefits in comparison to Microsoft and Google (there is no free food at Apple cafeterias or free gyms) and an atmosphere of secrecy are cited as the negative aspects of working at the company for engineers as well as lower-level workers (Working at Apple, 2010, Business Insider).

Second Part: Ethical issues in compensation management

Overall, in America the discrepancy between the salaries of the very richest and very poorest is growing. Large CEO salaries are often seen as symbolic of this fact: "while many workers are facing salary cuts, the average compensation for CEOs increased by 6% from 2011" (LaBossiere 2012). Defenders of large CEO salaries point out the tremendous stresses and demands of the job: for a company to flourish, it is essential to attract the best and brightest. However, research also indicates that "the propensity to leave [by subordinates] is greater if their company CEO is paid by a larger percentage than subordinates are" (U.S. CEO compensation: Abuse or reward, 2012, Accounting Web).