Discusses Major Compensation Issues regarding Executive Compensation. Provides Justification for Unreasonable Executive Compensation and Outlines measures for Executive Accountability
The study investigates the effects of incentives on employee’s productivity. The study had the
following objectives: The relationship between incentive and productivity of employee’s in organisations
This document discusses factors to consider when negotiating an expatriate compensation package. It defines an expatriate as an individual living and working in a country other than their home country, often temporarily. Expatriate compensation packages typically include a base salary, cost-of-living allowance, housing allowance, education allowances for children, relocation assistance, tax equalization payments, and sometimes spouse assistance. When negotiating a package, important factors to consider include the nature of employment (e.g. local contract vs long-term expat package), contract duration and termination notice terms, and what country's laws will govern the contract.
Welch and Immelt led GE with different styles. [1] Welch joined GE in 1960 and became CEO in 1981, focusing on acquisitions and innovations to drive profits. [2] He instituted a performance review system that fired bottom performers and generously rewarded top ones. [3] Immelt became CEO in 2001 facing challenges from 9/11, but restructured GE's portfolio and increased transparency and innovation.
Pricing managrial and professional jobsArslan Ahmad
This document discusses establishing strategic pay plans and compensation trends. It covers four main elements of compensating managers, including base pay, short-term incentives, long-term incentives, and executive benefits. Factors that determine executive pay include job complexity, the employer's ability to pay, and the executive's human capital. Competency-based pay ties a worker's pay to their competencies rather than their job title. Broad banding consolidates many pay grades into a few wide bands. Comparable worth refers to paying men and women equal wages for jobs of comparable value.
This document summarizes an analysis of executive compensation through various ethical frameworks and a case study on AIG. It discusses how executive pay has increased over time compared to average workers. While compensation is meant to incentivize performance, studies show pay is often not linked to returns. The document analyzes stakeholder perspectives and applies utilitarianism, justice theories, and ethics of care. It examines the AIG bonus scandal where executives received large payouts despite losses, and the public outrage this caused. Recommendations include linking pay to long-term performance and increasing shareholder say on compensation.
The document discusses different types of pay-for-performance plans including shop-floor incentives, sales force incentives, executive pay, and team-based pay. It outlines the importance of designing pay plans that support corporate objectives, are fair and equitable, and comply with laws. Different types of team-based pay plans like profit-sharing, gain-sharing, and employee stock ownership plans are described as ways to incentivize and reward employee performance.
compensation in a knowledge based economy
,
compensation strategy
,
compensation history
,
what is compensation
,
importance of compensation
,
pay and social class
The study investigates the effects of incentives on employee’s productivity. The study had the
following objectives: The relationship between incentive and productivity of employee’s in organisations
This document discusses factors to consider when negotiating an expatriate compensation package. It defines an expatriate as an individual living and working in a country other than their home country, often temporarily. Expatriate compensation packages typically include a base salary, cost-of-living allowance, housing allowance, education allowances for children, relocation assistance, tax equalization payments, and sometimes spouse assistance. When negotiating a package, important factors to consider include the nature of employment (e.g. local contract vs long-term expat package), contract duration and termination notice terms, and what country's laws will govern the contract.
Welch and Immelt led GE with different styles. [1] Welch joined GE in 1960 and became CEO in 1981, focusing on acquisitions and innovations to drive profits. [2] He instituted a performance review system that fired bottom performers and generously rewarded top ones. [3] Immelt became CEO in 2001 facing challenges from 9/11, but restructured GE's portfolio and increased transparency and innovation.
Pricing managrial and professional jobsArslan Ahmad
This document discusses establishing strategic pay plans and compensation trends. It covers four main elements of compensating managers, including base pay, short-term incentives, long-term incentives, and executive benefits. Factors that determine executive pay include job complexity, the employer's ability to pay, and the executive's human capital. Competency-based pay ties a worker's pay to their competencies rather than their job title. Broad banding consolidates many pay grades into a few wide bands. Comparable worth refers to paying men and women equal wages for jobs of comparable value.
This document summarizes an analysis of executive compensation through various ethical frameworks and a case study on AIG. It discusses how executive pay has increased over time compared to average workers. While compensation is meant to incentivize performance, studies show pay is often not linked to returns. The document analyzes stakeholder perspectives and applies utilitarianism, justice theories, and ethics of care. It examines the AIG bonus scandal where executives received large payouts despite losses, and the public outrage this caused. Recommendations include linking pay to long-term performance and increasing shareholder say on compensation.
The document discusses different types of pay-for-performance plans including shop-floor incentives, sales force incentives, executive pay, and team-based pay. It outlines the importance of designing pay plans that support corporate objectives, are fair and equitable, and comply with laws. Different types of team-based pay plans like profit-sharing, gain-sharing, and employee stock ownership plans are described as ways to incentivize and reward employee performance.
compensation in a knowledge based economy
,
compensation strategy
,
compensation history
,
what is compensation
,
importance of compensation
,
pay and social class
This document discusses dual career couples in the context of expatriation. It begins with defining dual career couples as both partners pursuing independent careers, being highly educated with upward career orientations. It then addresses challenges such as social ties between expatriates, stress from linked lives between partners, and issues with trailing spouses. Potential solutions discussed include recruiting candidates considering family life stages, dual career assistance like job placement for spouses, and family-oriented workplace policies around leave, childcare and flexibility. The conclusion emphasizes family readiness and adaptability as key challenges as dual career couples become more common.
The document discusses performance management systems and international human resource challenges during mergers and acquisitions. It provides examples of major M&A deals and discusses challenges such as identifying and communicating reasons for change, assessing corporate cultures, deciding on organizational structures, and integrating HR policies. The document also discusses strategies for effective HR integration like due diligence, talent retention, change management, and leadership development. Failure cases like the attempted Volvo-Renault merger are examined, highlighting the importance of addressing cultural issues.
This document discusses executive compensation, including its meaning, features, and common components. Executive compensation packages typically include a base salary, allowances, incentives, and perquisites. Companies determine compensation based on external competition, internal equity, and pay for performance. Packages may include salary, bonuses, equity compensation, and benefits like healthcare. Public sector executive pay is often lower than comparable private sector roles.
Executive compensation consists of salary, bonus, long-term incentives, and perquisites. Salary makes up 40-60% of compensation but is subject to taxes, while bonuses and stock options are incentives. Perquisites include benefits like cars, clubs, and first-class travel. Compensation also includes retirement benefits, health insurance, and vacations. Unique features of executive pay include secrecy, varying amounts between executives, and tying pay to organizational performance. Companies use various strategies like cost-to-company packages, performance-linked payments, and flexible benefits to motivate and retain executives.
Compensation Dimensions (Payment for Work and Performance, Payment for Non-working Days, Loss of Job Income Continuation Benefit, Disability Income Continuation Benefit, Deferred Income, Spouse/Family Income Continuation Benefit, Health, Accident and Liability Protection, Income Equivalent Payments)
The document discusses strategies for compensation philosophy and plans after a bank merger. It proposes:
1) Targeting salaries in the top quartile of the market to attract and retain high-performing employees.
2) Developing clear job expectations and descriptions to communicate the demanding performance standards required for above-market compensation.
3) Gathering input from employees, management, industry trends, and market practices to design fair, communicative compensation plans that balance short-term and long-term interests.
This document discusses various types of pay-for-performance plans including merit pay, variable pay, individual and group incentives, and long-term incentives. Merit pay rewards higher performers with additional pay based on their performance rating. Variable pay ties compensation to measurable performance factors. Individual incentives include piece-rate plans, standard hour plans, and plans that set multiple piece rates based on production levels. Group incentives like profit-sharing reward employee groups when organizational goals are met. Long-term incentives focus on long-term value creation through options, restricted stock, and plans with performance acceleration.
Compensation is the process of providing adequate, equitable and fair remuneration to the employees. It is what employees receive in exchange for their contribution to the organization. It is a comprehensive term which includes pay, incentives and benefits offered to the employees.
PURPOSEOF COMPENSATION
THE PAY MODEL
STRATEGIC COMPENSATION PLANNING
COMPENSATION POLICY ISSUES
This document discusses the relationship between organizational culture and strategic human resource management. It provides frameworks for analyzing organizational culture, including Hofstede's cultural dimensions model, the competing values framework, and the cultural web. The case study of Dicom Group plc is presented, which has a culture characterized by flat structures, integrity and respect in treating employees, and motivating workers to outcompete rivals. For Dicom, aligning its flexible and loose culture with its goals of acceleration, transformation, and maintaining market share supports high performance. The document concludes that organizational culture can enhance performance and satisfaction if it provides shared behavioral styles, approaches to problem-solving, and norms to guide rewards and prevent undesired behaviors.
Compensation management involves designing total compensation packages to attract, motivate and retain employees. It includes direct monetary compensation like salary and incentives, as well as indirect compensation like benefits. Compensation objectives are to recruit and retain talent, boost morale and performance, and ensure legal and internal pay equity. Various factors like an employee's role, skills, market pay and organizational budget affect compensation. Common components of compensation include salary, bonuses, statutory benefits, and stock ownership plans.
Compensation Management importance and factors influencing compensationalisdq550
Compensation is what employees receive in exchange for their work, including both monetary and non-monetary benefits. It is important for both motivating employees and reducing costs for organizations. Many factors influence compensation, including external factors like the labor market, cost of living, unions, and laws, as well as internal factors like the organization's compensation policies, ability to pay, job analyses, and individual employee performance. Effective compensation systems can help organizations attract, retain, and motivate talented staff.
Concept of Compensation, Exploring & Defining Compensation Context (Strategic Compensation, Total Compensation, Extrinsic Compensation, Intrinsic Compensation, Components of Compensation, Factors Influencing Compensation, Wage and Salary, Incentives, Fringe Benefits, Perquisites, Govt. Regulations for Compensation in India, Minimum Wage, Fair Wage, Living Wage, Calculation of Minimum Wages)
1) A union campaign brought executive compensation into the public eye through media coverage, highlighting concerns about high CEO pay.
2) The union's annual awareness campaign aims to build awareness of perceived pay inequities between CEOs and frontline workers, sometimes prompting union formation.
3) The publicity has caused turmoil at Oakwood Lawn, where employees learned their CEO is among the highest paid in the US, despite not receiving a pay increase due to the company's financial challenges.
This document discusses different types of group incentive and team-based compensation plans including Priestman's plan, Rucker plan, Scanlon plan, and gain sharing/profit sharing plans. It provides details on the key features and objectives of each plan, such as rewarding group performance, encouraging cost-saving activities, and sharing profits with employees. The plans aim to foster cooperation and improve productivity and motivation among team members.
This document discusses compensation and wage theories. It provides an overview of different types of compensation including direct and indirect compensation. It also covers various wage concepts like minimum wage, living wage, and fair wage. Several theories that seek to explain how wages are determined are outlined, including the subsistence theory, wage fund theory, surplus value theory, residual claimant theory, marginal productivity theory, bargaining theory, and behavioural theory. The goals of compensation administration are noted as designing a cost-effective pay structure to attract, motivate and retain competent employees.
This document discusses compensation management and provides details on:
1) The definition and types of compensation including direct compensation like wages and salaries, and indirect compensation like benefits.
2) The purposes and components of compensation including attracting applicants, retaining employees, motivating performance, and administering legal pay requirements.
3) Methods of determining employee pay such as base salary plus cost of living adjustments, scales, incentives, bonuses, and merit-based pay.
4) The job evaluation process which determines relative job worth through analyzing jobs, developing and selecting evaluation methods, and evaluating positions.
This document summarizes a dispute over executive compensation at a small engineering services firm with annual revenues under $10 million. The majority owner set their own compensation which was questioned in a 2006 DCAA audit but not resolved until 2011. Key issues included what survey data and job descriptions were appropriate to evaluate compensation reasonableness, what percentile of the survey data should be used, and whether bonuses paid after the fiscal year should be allowed. Lessons learned included the need for a written compensation plan, robust justification of compensation levels, and understanding that audits can take years to resolve.
This document discusses performance management and creating a performance-driven organization. It defines key terms and outlines several approaches to performance management, including aligning individual goals with organizational objectives, measuring and analyzing performance, rewarding achievement, and providing feedback. It also discusses motivation theories and designing compensation plans, like merit pay and incentive plans, that link pay to individual and organizational performance.
This document discusses dual career couples in the context of expatriation. It begins with defining dual career couples as both partners pursuing independent careers, being highly educated with upward career orientations. It then addresses challenges such as social ties between expatriates, stress from linked lives between partners, and issues with trailing spouses. Potential solutions discussed include recruiting candidates considering family life stages, dual career assistance like job placement for spouses, and family-oriented workplace policies around leave, childcare and flexibility. The conclusion emphasizes family readiness and adaptability as key challenges as dual career couples become more common.
The document discusses performance management systems and international human resource challenges during mergers and acquisitions. It provides examples of major M&A deals and discusses challenges such as identifying and communicating reasons for change, assessing corporate cultures, deciding on organizational structures, and integrating HR policies. The document also discusses strategies for effective HR integration like due diligence, talent retention, change management, and leadership development. Failure cases like the attempted Volvo-Renault merger are examined, highlighting the importance of addressing cultural issues.
This document discusses executive compensation, including its meaning, features, and common components. Executive compensation packages typically include a base salary, allowances, incentives, and perquisites. Companies determine compensation based on external competition, internal equity, and pay for performance. Packages may include salary, bonuses, equity compensation, and benefits like healthcare. Public sector executive pay is often lower than comparable private sector roles.
Executive compensation consists of salary, bonus, long-term incentives, and perquisites. Salary makes up 40-60% of compensation but is subject to taxes, while bonuses and stock options are incentives. Perquisites include benefits like cars, clubs, and first-class travel. Compensation also includes retirement benefits, health insurance, and vacations. Unique features of executive pay include secrecy, varying amounts between executives, and tying pay to organizational performance. Companies use various strategies like cost-to-company packages, performance-linked payments, and flexible benefits to motivate and retain executives.
Compensation Dimensions (Payment for Work and Performance, Payment for Non-working Days, Loss of Job Income Continuation Benefit, Disability Income Continuation Benefit, Deferred Income, Spouse/Family Income Continuation Benefit, Health, Accident and Liability Protection, Income Equivalent Payments)
The document discusses strategies for compensation philosophy and plans after a bank merger. It proposes:
1) Targeting salaries in the top quartile of the market to attract and retain high-performing employees.
2) Developing clear job expectations and descriptions to communicate the demanding performance standards required for above-market compensation.
3) Gathering input from employees, management, industry trends, and market practices to design fair, communicative compensation plans that balance short-term and long-term interests.
This document discusses various types of pay-for-performance plans including merit pay, variable pay, individual and group incentives, and long-term incentives. Merit pay rewards higher performers with additional pay based on their performance rating. Variable pay ties compensation to measurable performance factors. Individual incentives include piece-rate plans, standard hour plans, and plans that set multiple piece rates based on production levels. Group incentives like profit-sharing reward employee groups when organizational goals are met. Long-term incentives focus on long-term value creation through options, restricted stock, and plans with performance acceleration.
Compensation is the process of providing adequate, equitable and fair remuneration to the employees. It is what employees receive in exchange for their contribution to the organization. It is a comprehensive term which includes pay, incentives and benefits offered to the employees.
PURPOSEOF COMPENSATION
THE PAY MODEL
STRATEGIC COMPENSATION PLANNING
COMPENSATION POLICY ISSUES
This document discusses the relationship between organizational culture and strategic human resource management. It provides frameworks for analyzing organizational culture, including Hofstede's cultural dimensions model, the competing values framework, and the cultural web. The case study of Dicom Group plc is presented, which has a culture characterized by flat structures, integrity and respect in treating employees, and motivating workers to outcompete rivals. For Dicom, aligning its flexible and loose culture with its goals of acceleration, transformation, and maintaining market share supports high performance. The document concludes that organizational culture can enhance performance and satisfaction if it provides shared behavioral styles, approaches to problem-solving, and norms to guide rewards and prevent undesired behaviors.
Compensation management involves designing total compensation packages to attract, motivate and retain employees. It includes direct monetary compensation like salary and incentives, as well as indirect compensation like benefits. Compensation objectives are to recruit and retain talent, boost morale and performance, and ensure legal and internal pay equity. Various factors like an employee's role, skills, market pay and organizational budget affect compensation. Common components of compensation include salary, bonuses, statutory benefits, and stock ownership plans.
Compensation Management importance and factors influencing compensationalisdq550
Compensation is what employees receive in exchange for their work, including both monetary and non-monetary benefits. It is important for both motivating employees and reducing costs for organizations. Many factors influence compensation, including external factors like the labor market, cost of living, unions, and laws, as well as internal factors like the organization's compensation policies, ability to pay, job analyses, and individual employee performance. Effective compensation systems can help organizations attract, retain, and motivate talented staff.
Concept of Compensation, Exploring & Defining Compensation Context (Strategic Compensation, Total Compensation, Extrinsic Compensation, Intrinsic Compensation, Components of Compensation, Factors Influencing Compensation, Wage and Salary, Incentives, Fringe Benefits, Perquisites, Govt. Regulations for Compensation in India, Minimum Wage, Fair Wage, Living Wage, Calculation of Minimum Wages)
1) A union campaign brought executive compensation into the public eye through media coverage, highlighting concerns about high CEO pay.
2) The union's annual awareness campaign aims to build awareness of perceived pay inequities between CEOs and frontline workers, sometimes prompting union formation.
3) The publicity has caused turmoil at Oakwood Lawn, where employees learned their CEO is among the highest paid in the US, despite not receiving a pay increase due to the company's financial challenges.
This document discusses different types of group incentive and team-based compensation plans including Priestman's plan, Rucker plan, Scanlon plan, and gain sharing/profit sharing plans. It provides details on the key features and objectives of each plan, such as rewarding group performance, encouraging cost-saving activities, and sharing profits with employees. The plans aim to foster cooperation and improve productivity and motivation among team members.
This document discusses compensation and wage theories. It provides an overview of different types of compensation including direct and indirect compensation. It also covers various wage concepts like minimum wage, living wage, and fair wage. Several theories that seek to explain how wages are determined are outlined, including the subsistence theory, wage fund theory, surplus value theory, residual claimant theory, marginal productivity theory, bargaining theory, and behavioural theory. The goals of compensation administration are noted as designing a cost-effective pay structure to attract, motivate and retain competent employees.
This document discusses compensation management and provides details on:
1) The definition and types of compensation including direct compensation like wages and salaries, and indirect compensation like benefits.
2) The purposes and components of compensation including attracting applicants, retaining employees, motivating performance, and administering legal pay requirements.
3) Methods of determining employee pay such as base salary plus cost of living adjustments, scales, incentives, bonuses, and merit-based pay.
4) The job evaluation process which determines relative job worth through analyzing jobs, developing and selecting evaluation methods, and evaluating positions.
This document summarizes a dispute over executive compensation at a small engineering services firm with annual revenues under $10 million. The majority owner set their own compensation which was questioned in a 2006 DCAA audit but not resolved until 2011. Key issues included what survey data and job descriptions were appropriate to evaluate compensation reasonableness, what percentile of the survey data should be used, and whether bonuses paid after the fiscal year should be allowed. Lessons learned included the need for a written compensation plan, robust justification of compensation levels, and understanding that audits can take years to resolve.
This document discusses performance management and creating a performance-driven organization. It defines key terms and outlines several approaches to performance management, including aligning individual goals with organizational objectives, measuring and analyzing performance, rewarding achievement, and providing feedback. It also discusses motivation theories and designing compensation plans, like merit pay and incentive plans, that link pay to individual and organizational performance.
A Review on Hinnebusch's Article "American Invasion of Iraq: causes and Conse...Atam Motufoua
This review highlights some of the main arguments in the journal article "American invasion of Iraq: Causes and consequences". It also include personal comments.
Este documento descreve o plano de estudos e calendário de um Executive MBA oferecido pela ISCTE Business School em Portugal. O programa é estruturado em 4+1 vectores principais: módulos introdutórios, 6 ciclos de disciplinas, workshops com gestores, sessões residenciais e um ciclo final focado em soft skills. O plano visa desenvolver as competências de gestão dos alunos de forma a prepará-los para papéis de liderança.
This is an Article Review on ‘Preferential Mistreatment: How Victim Status Moderates the Relationship between Organizational Citizenship Behavior and Workplace Victimization’ which endeavors to inquire whether employees are vulnerable by the harmful actions of others and to test this claim the authors employed the three indicators of social status sex, hierarchical position, and racial background to arrive at the this hypothesis
Roshan Thiran wrote a few articles on Increasing Your Return on Luck. Attached is a presentation he made to various audiences on the ability to Increase Your Luck - Or ROL - Return on Luck. To read his article, go to : https://leaderonomics.com/leadership/be-a-leader/top-10-ways-to-increase-your-luck and also to: https://leaderonomics.com/leadership/be-a-leader/luck-is-not-luck
The document discusses various aspects of control in corporate governance including stakeholders, management control systems, and the role of boards. It provides an overview and discussion of agency problems in large family business groups. It also presents a case study on General Motors and identifies various corporate governance issues the company faced. The document outlines expectations and tasks for groups to analyze scenarios, risks, and responses regarding the General Motors case study.
Case study analysis, new coke by coca cola biggest marketing blunder everAtam Motufoua
Coca-Cola launched "New Coke" in the 1980s after extensive consumer research and testing, believing it would better meet consumer preferences. However, New Coke was met with significant backlash from loyal Coca-Cola drinkers. The document recommends that innovative companies experiment carefully with consumer feedback, as resistance to change can be strong when brands are deeply ingrained in culture. It also warns against overreliance on surveys and tests, as these may not truly capture consumer satisfaction. Above all, companies should avoid actions that could damage or alienate their loyal customer bases.
This document contains summaries of several case studies from a business ethics textbook. The first case study describes the moral philosophy of Socrates and how he refused to escape prison to face an unjust execution, believing it was more important to uphold moral principles. The second case summarizes a case where Chinese milk producers intentionally added a toxic chemical to milk for profit, which killed and sickened many children before being discovered.
Case study Business ethics, Being Smart about Smartphones Fatima Aljaidi
The document discusses several ethical issues related to smartphone use in the workplace:
1) Smartphones can distract employees and cause them to miss deadlines from time spent on phones.
2) Employer monitoring of employee phone use raises privacy issues regarding personal usage of company networks.
3) Using company WiFi and time for personal reasons improperly allocates company resources.
The document suggests companies create clear policies around appropriate smartphone use at work, including allowing personal use during breaks but requiring work-related use during meetings with permission. Rules should also distinguish between in-house and client meetings, using separate phones in the latter case.
Smartphone usage has increased significantly in recent years and has positively impacted education, communication in the workplace, and productivity. Smartphones allow for increased social engagement through access to social networking sites on the go. They have also helped improve education by enabling students to research and access information for schoolwork. In the workplace, smartphones facilitate communication through email and business applications from any location. Productivity has risen as well since smartphones allow users to work remotely by performing normal computer functions outside the office.
A security feature can be effective only if the user can use it effectively and the configuration settings are unambiguous. A complicated UI leads to most of the configuration errors. Most of the computer security failures find its genesis in the configuration errors.
The advent of Internet and ease of communication has thrown up the many such challenges; one of them being the security concerns about the data stored and transmitted. With the advent of hand phones, the security concerns have moved one notch up because mobile phones and especially smart phones are not merely devices for communication, but virtual identity databases. Though there has been a steady progress on the technological front, the user-interfaces are yet to become up to the mark for the end-user. Most of the UIs are complicated and confusing which leads the user to commit errors and hence becomes a security nightmare. Our view is that the security and usability share an inverse relation. If the usability of the system is low, the security features are mostly ignored by the users as that seems the most convenient thing to do. However, in case of UI with high usability factor, the designers have to compromise over a lot of security features to make it usable.
According to us, the missing link seems to be the absence or adaptation of a common standard for UI across the platforms. This study compares three most popular OS platforms for smart devices Android by Google, iOS by Apple and Windows by Microsoft on the basis of their usability factors in context of security features provided by them. This summary should help develop a model for future UI developers.
Ethics Case Study Review_JKostak_APA_StyleJohn Kostak
This document provides a summary and analysis of ethics issues arising in modern networked businesses. It discusses how the integration of corporate, social, and community networks blurs traditional information boundaries and policies. Key points addressed include:
- New stakeholders and dynamic engagement models require updated communications strategies.
- Ethics and governance issues become interwoven across functions as lines are blurred.
- Network security vulnerabilities increase with virtual networks, requiring updated privacy and security policies.
- There must be a balancing of customer privacy, security needs, and transparency demands with business interests.
- A new "Virtual Enterprise Ethics Engagement Model" is proposed to define and manage ethics in integrated virtual networks.
This document discusses a decision made by Tyco International in response to a situation facing the organization. The situation involved misconduct by former CEO Dennis Kozlowski and CFO Mark Swartz, who were sued by the company for over $100 million after improper financial activities. A new CEO and management team made decisions to reform corporate governance and accounting practices. A group including the new CEO and VP of Governance made the final decisions, which included severance agreement reforms, an independent board chair, an ethics guide, and staff replacements. The implications were more ethical leadership and restored investor faith.
The document discusses how low-cost smartphones have enabled widespread use of mobile apps in India. It notes that 40 million Indians access the internet through mobile phones, with 30 million mobile app downloads per week. Most users are aged 18-29. Smartphones have benefited job portals, travel portals, social networking, the film industry, advertisers, e-commerce firms, and government and banking sectors by allowing them to reach a broader customer base. The smartphone revolution untaps rural markets and encourages businesses to diversify into e-commerce.
This document discusses executive compensation and lessons learned from past practices. It provides background on compensation of chief executives, particularly in the United States. Key issues discussed include the many parties involved in executive compensation decisions, long-term rewards not tied to performance, and public outrage over large severance packages. The Dodd-Frank Act aimed to increase shareholder input and tie compensation more closely to performance. While reforms addressed some issues, questions still remain around justifying pay gaps and potential unintended consequences of performance-based compensation.
Executive Compensation at Financial InstitutionsDavid Stone
This document discusses executive compensation at financial institutions. It provides context on the structure of executive compensation packages generally and how they have changed over time. While compensation structures are similar across industries, the document argues executive compensation at financial institutions should better account for risks to stakeholders beyond shareholders, as excessive risk-taking contributed to the global financial crisis. The crisis has spotlighted compensation at financial firms and led to reductions, especially for CEOs, though broader reform is still needed.
The document discusses a study examining factors that influence CEO salaries. It reviews literature finding positive correlations between firm performance, size, and CEO compensation. The study analyzes salaries and characteristics of 70 Fortune 500 CEOs using regression analysis. Sixteen independent variables are considered, including CEO attributes, firm financials, and market data. Preliminary results found profit margin had the strongest positive impact on salary, while age and long-term debt also positively impacted salary. Further analysis is needed to better predict CEO pay.
This document discusses six questions about executive compensation and summarizes recent research on this topic. It finds that while US CEOs receive higher compensation than in other countries, the structure of US compensation aims to align CEO incentives with shareholder interests through stock ownership. Recent studies have helped address longstanding puzzles by analyzing stock and option holdings, finding compensation is strongly linked to firm performance and CEOs can face penalties for poor performance. There remain open questions around how much compensation is optimal and whether the system could be further improved.
111021, 137 PM Commentary - HRMN 395 7381 The Total RewardsBenitoSumpter862
11/10/21, 1:37 PM Commentary - HRMN 395 7381 The Total Rewards Approach to Compensation Management (2218)
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Module 2: Core Elements of Monetary Rewards
Topics
Topic 1: What are Monetary Rewards?
Topic 2: Key Elements of Analysis and Documentation
Topic 3: Assessing and Rewarding Performance
Topic 4: Regulatory Aspects of Monetary Rewards
Topic 5: Philosophy of Market Positioning and Link to Total Rewards
Topic 6: Conclusions
Topic 1: What are Monetary Rewards?
The total rewards approach to compensation management is strategically planning a
targeted reward package to successfully attract, retain, and motivate segmented
populations of employees who possess the requisite knowledge, skills, and abilities (KSAs)
needed to achieve the organization's objectives. Table 1.2 in module 1 illustrates the
interdependent relationship of the components of the total rewards approach to
compensation. The table shares the three major components of total rewards, including
the monetary, non-monetary, and other elements of the work experience, which combine
strategically for the total rewards philosophy for the organization. Column 1 in Table 2.1
below shares many of the monetary rewards organizations offer today and will be
described in this module.
https://leocontent.umgc.edu/content/umuc/tus/hrmn/hrmn395/2218/modules/m2-module-2/s3-commentary.html?ou=615465#I
https://leocontent.umgc.edu/content/umuc/tus/hrmn/hrmn395/2218/modules/m2-module-2/s3-commentary.html?ou=615465#II
https://leocontent.umgc.edu/content/umuc/tus/hrmn/hrmn395/2218/modules/m2-module-2/s3-commentary.html?ou=615465#III
https://leocontent.umgc.edu/content/umuc/tus/hrmn/hrmn395/2218/modules/m2-module-2/s3-commentary.html?ou=615465#IV
https://leocontent.umgc.edu/content/umuc/tus/hrmn/hrmn395/2218/modules/m2-module-2/s3-commentary.html?ou=615465#V
https://leocontent.umgc.edu/content/umuc/tus/hrmn/hrmn395/2218/modules/m2-module-2/s3-commentary.html?ou=615465#VI
11/10/21, 1:37 PM Commentary - HRMN 395 7381 The Total Rewards Approach to Compensation Management (2218)
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Table 2.1 Three Elements of the Total Rewards Model
Monetary Rewards
Non-monetary
Rewards
Work Experience
Base Pay
Income Protection
Benefits
Values of the Organization
Variable Pay Medical Insurance
Community (Individual
and Organizational)
Merit and Cost of
Living Increases
Vision and Dental Recognition
Retirement Savings Disability Training and Development
Performance
Feedback
Life Insurance Promotions
Deferred
Compensation
Paid Time Off Sense of Accomplishment
Day Care
Employee
Assistance
Program
Health Related
Programs
Tuition Assistance
Monetary Rewards
Monetary rewards are, unmistakably, a vital element of total rewards. Christofferson &
King (2006, p. 27) describe mometary rewards as "the pay provided by an employer to an
employee for services rendered ...
111021, 137 PM Commentary - HRMN 395 7381 The Total RewardsSantosConleyha
11/10/21, 1:37 PM Commentary - HRMN 395 7381 The Total Rewards Approach to Compensation Management (2218)
https://learn.umgc.edu/d2l/le/content/615465/viewContent/22667815/View 1/19
Module 2: Core Elements of Monetary Rewards
Topics
Topic 1: What are Monetary Rewards?
Topic 2: Key Elements of Analysis and Documentation
Topic 3: Assessing and Rewarding Performance
Topic 4: Regulatory Aspects of Monetary Rewards
Topic 5: Philosophy of Market Positioning and Link to Total Rewards
Topic 6: Conclusions
Topic 1: What are Monetary Rewards?
The total rewards approach to compensation management is strategically planning a
targeted reward package to successfully attract, retain, and motivate segmented
populations of employees who possess the requisite knowledge, skills, and abilities (KSAs)
needed to achieve the organization's objectives. Table 1.2 in module 1 illustrates the
interdependent relationship of the components of the total rewards approach to
compensation. The table shares the three major components of total rewards, including
the monetary, non-monetary, and other elements of the work experience, which combine
strategically for the total rewards philosophy for the organization. Column 1 in Table 2.1
below shares many of the monetary rewards organizations offer today and will be
described in this module.
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11/10/21, 1:37 PM Commentary - HRMN 395 7381 The Total Rewards Approach to Compensation Management (2218)
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Table 2.1 Three Elements of the Total Rewards Model
Monetary Rewards
Non-monetary
Rewards
Work Experience
Base Pay
Income Protection
Benefits
Values of the Organization
Variable Pay Medical Insurance
Community (Individual
and Organizational)
Merit and Cost of
Living Increases
Vision and Dental Recognition
Retirement Savings Disability Training and Development
Performance
Feedback
Life Insurance Promotions
Deferred
Compensation
Paid Time Off Sense of Accomplishment
Day Care
Employee
Assistance
Program
Health Related
Programs
Tuition Assistance
Monetary Rewards
Monetary rewards are, unmistakably, a vital element of total rewards. Christofferson &
King (2006, p. 27) describe mometary rewards as "the pay provided by an employer to an
employee for services rendered ...
There is a large disconnect between public perception and corporate directors' views on CEO pay. While most of the public believes CEO pay is too high, directors believe it is appropriate. There is also disagreement on how to measure corporate performance and determine CEO contributions. Directors believe CEOs are responsible for 40% of company performance, but studies show it may be much lower. No standard model exists for determining the appropriate value sharing between CEO pay and shareholder returns. This lack of agreement means controversy over CEO compensation will likely continue.
HR, 3eAngelo S. DeNisi, Ricky W. GriffnThe amount of value.docxwellesleyterresa
HR, 3e
Angelo S. DeNisi, Ricky W. Griffn
The amount of value people create for an organization and what the organization gives them as compensation for that value are important determinants of organizational competitiveness. If employers pay too much for the value created by workers, then profits (and hence competitiveness) will suffer. But if they pay too little or demand too much from their workers for what they are paying, they will suffer in different ways: lower-quality workers, higher turnover, or employee fatigue and stress. Clearly, then, managing compensation and benefits are important activities for any organization. And just as clearly, Nucor managers have a keen understanding of the relationship between worker compensation and company performance.
Compensation and benefits refer to the various types of outcomes employees receive for their time at work. Compensation is the set of rewards that organizations provide to individuals in return for their willingness to perform various jobs and tasks within the organization. Benefits are the various rewards, incentives, and other items of value that an organization provides to its employees beyond wages, salaries, and other forms of financial compensation. The term total compensation is sometimes used to refer to the overall value of financial compensation plus the value of additional benefits that the organization provides.
Compensationis the set of rewards that organizations provide to individuals in return for their willingness to perform various jobs and tasks within the organization.
Benefitsgenerally refer to various rewards, incentives, and other things of value that an organization provides to its employees beyond their wages, salaries, and other forms of direct financial compensation.
In this chapter, we cover the basic concepts of compensation and benefits. We start by examining how compensation strategies are developed, and then we turn to the administration of compensation programs and how organizations evaluate their compensation programs. We look at benefits, discussing the basic reasons for benefit plans and describing different types of benefit plans typically found in organizations. Next we consider the often controversial topic of executive compensation, discussing the basic components of executive-compensation packages and why they are so controversial. We conclude with a discussion of legal issues associated with compensation and benefits and the ways in which organizations can evaluate their compensation and benefit programs.
9-1 DEVELOPING A COMPRATION STRATEGY
Compensation should never be a result of random decisions but instead the result of a careful and systematic strategic process.3 Embedded in the process is an understanding of the basic purposes of compensation, an assessment of strategic options for compensation, knowledge of the determinants of compensation strategy, and the use of pay surveys.
9-1a Basic Purposes of Compensation
Compensation has several f ...
Executive Compensation and IncentivesMartin J. ConyonEx.docxcravennichole326
Executive Compensation and Incentives
Martin J. Conyon*
Executive Overview
The objective of a properly designed executive compensation package is to attract, retain, and motivate
CEOs and senior management. The standard economic approach for understanding executive pay is the
principal-agent model. This paper documents the changes in executive pay and incentives in U.S. firms
between 1993 and 2003. We consider reasons for these transformations, including agency theory, changes
in the managerial labor markets, shifts in firm strategy, and theories concerning managerial power. We show that
boards and compensation committees have become more independent over time. In addition, we demonstrate
that compensation committees containing affiliated directors do not set greater pay or fewer incentives.
Introduction
E
xecutive compensation is a complex and con-
troversial subject. For many years, academics,
policymakers, and the media have drawn atten-
tion to the high levels of pay awarded to U.S.
chief executive officers (CEOs), questioning
whether they are consistent with shareholder in-
terests.1 Some academics have further argued that
flaws in CEO pay arrangements and deviations
from shareholders’ interests are widespread and
considerable.2 For example, Lucian Bebchuk and
Jesse Fried provide a lucid account of the mana-
gerial power view and accompanying evidence.3
Marianne Bertrand and Sendhil Mullainathan too
provide an analysis of the ‘skimming view’ of CEO
pay.4 In contrast, John Core et al. present an
economic contracting approach to executive pay
and incentives, assessing whether CEOs receive
inefficient pay without performance.5 In this pa-
per, we show what has happened to CEO pay in
the United States. We do not claim to distinguish
between the contracting and managerial power
views of executive pay. Instead, we document the
pattern of executive pay and incentives in the
United States, investigating whether this pattern
is consistent with economic theory.
The Context: Who Sets Executive Pay?
B
efore examining the empirical evidence pre-
sented in this paper, it is important to consider
the pay-setting process and who sets executive
pay. The standard economic theory of executive
compensation is the principal-agent model.6 The
theory maintains that firms seek to design the most
efficient compensation packages possible in order to
attract, retain, and motivate CEOs, executives, and
managers.7 In the agency model, shareholders set
pay. In practice, however, the compensation com-
mittee of the board determines pay on behalf of
shareholders. A principal (shareholder) designs a
contract and makes an offer to an agent (CEO/
manager). Executive compensation ameliorates a
moral hazard problem (i.e., manager opportunism)
arising from low firm ownership. By using stock
options, restricted stock, and long-term contracts,
shareholders motivate the CEO to maximize firm
value. In other words, shareholders try to design
optimal compensation packages .
The document discusses compensation and benefits strategies for Landslide Limousine, a small business in Austin, Texas. It summarizes the results of a market evaluation conducted by Atwood and Allen Consulting, which found the average salary for limousine drivers to be higher than what LL can afford to pay. The consulting firm recommends positioning LL to pay drivers $2/hour less than average while offering additional benefits and incentives. It also suggests paying management 5% more to maintain pay balance and focusing compensation on incentives to help control fixed labor costs.
January 23rd, 2012
What Is CEO Talent Worth?
By Professor, David F. Larcker and Brian Tayan, Researcher, Corporate Governance Research Program, Stanford Graduate School of Business
January 24, 2012
The topic of executive compensation elicits strong emotions among corporate stakeholders and practitioners. On the one hand are those who believe that chief executive officers in the United States are overpaid. On the other hand are those who believe that CEOs are simply paid the going fair-market rate.
Much less effort, however, is put into determining whether total compensation is commensurate with the value of services rendered.
We examine the issue and explain how such a calculation might be performed. We ask:
* How much value creation should be attributable to the efforts of the CEO?
* What percentage of this value should be fairly offered as compensation?
* Can the board actually perform this calculation? If not, how does it make rational decisions about pay levels?
Read the attached Closer Look and let us know what you think!
This document summarizes research on the relationship between executive compensation and firm performance. The key points are:
1. Executive compensation has increased dramatically over the last 3 decades, far outpacing worker pay growth. However, research studies have found little to no correlation between high executive pay and stronger firm performance.
2. While companies argue that incentive-based pay motivates executives, some studies show executive pay is often not closely tied to performance metrics and stock price movements.
3. Alternative views of "performance" beyond short-term profits, such as investment, innovation, and workforce development, are rarely considered in executive compensation.
4. To strengthen the link between pay and performance, companies increasingly use long-
Running head CASE STUDY 31CASE STUDY 31AbstractThe hu.docxhealdkathaleen
Running head: CASE STUDY 3 1
CASE STUDY 3 1
Abstract
The human resource manager, Don, is tasked with analyzing the compensation package of the CEO and ensuring fair pay to all employees. The factors that outline this pay structure are all vital importance when determining the compensation structure. The staff seen on the front lines are important to the organization but retaining the CEO is a great determining factor in the success of an organization. The CEO has a higher chance of remailing with the company if they are offered a competitive compensation package.
There are numerous segments that make up the director of human resources responsibilities. For this company, these responsibilities lie on Don, who must create the executive pay structure and condense each component. Don needs to gather further information to correctly determine the effective pay rate for the company’s CEO. The best solution for Don is to use the three best hypotheses to depict the procedures identified with setting official remuneration: office hypothesis, competition hypothesis, and processes used in creating executive compensation. These three theories are described by author Marticchio (2017) as the agency theory, tournament theory, and social comparison theory.
If Don were to utilize the agency theory, he would consider pressuring the COE’s proprietorship within the company. If Don chose to make the pay package through the social comparison theory gathering details on the market rates for similar industries is a must. With this theory, Don can also determine any parts of the CEO’s salary that is performance based and use those numbers to show how the CEO is adding success to the company. Though the company may be in a financial bind, this information can give detail into how the CEO is leading the company to a better future.
As the head of HR, Don must steer between implementing the best practices for the CEO's compensation plans or tweaking the compensation to line up with the objectives to of the investors (Hou, Priem, and Goranova). It is normal that Don will come across bothersome instances regarding the CEO’s pay structure and whether it is the more fair or logical decision. This HR executive has the best chance to create an excellent compensation package that all parties would agree on by detailing the pay contrasts directly to the Oakwood workers and featuring the connection that the pay structure has based on the CEO’s performance. By explaining the abilities, skills, and knowledge the COE must bring into his role, it will be better understood that his higher pay is justified. This pay structure works so well because the CEO only benefits when the company grows and gains in profits (Brisker, Colak, and Peterson, 2014). Offering the employees some examples of commitments and achievements the CEo has performed will provide background into how the CEO will further the company and create opportunities for everyone.
Don’s main goal is to ...
Project report on compensation and benefitssukesh gowda
This document provides an overview of compensation and benefits. It discusses compensation as an exchange between employees and employers, with employees receiving financial and non-financial rewards in return for their work. It also discusses the objectives of compensation systems, including attracting, retaining, and motivating employees, as well as ensuring fairness and equity. Key factors that influence compensation levels and structures are then outlined, including labor market conditions, legislation, collective bargaining agreements, management attitudes, and an organization's ability to pay.
Executive Compensation: Exploring Models and Considerations in Corporate Remu...assignmentcafe1
Welcome to our comprehensive SlideShare presentation on executive compensation, where we delve into the intricate world of corporate remuneration models and considerations. Join us as we explore the various approaches, challenges, and ethical considerations surrounding executive compensation in today's corporate landscape.
In this enlightening presentation, we aim to provide a nuanced understanding of the complexities involved in determining executive compensation packages. We examine different models and frameworks, including performance-based pay, equity-based incentives, and bonus structures, and assess their effectiveness in aligning executive incentives with organizational goals.
Through a careful analysis of industry practices, regulatory frameworks, and shareholder perspectives, we explore the considerations that shape executive compensation decisions. We delve into the challenges of balancing competitive market forces, ensuring fairness and transparency, and addressing concerns related to income inequality and excessive executive pay.
Furthermore, we examine the impact of executive compensation on corporate governance, organizational culture, and long-term value creation. We discuss the influence of compensation structures on risk-taking behavior, strategic decision-making, and the attraction and retention of top talent within the company.
Our presentation goes beyond theoretical discussions by incorporating real-world examples and case studies. By exploring notable instances of successful and controversial executive compensation practices, we aim to provide practical insights and lessons for organizations navigating this complex landscape.
Through this exploration, we encourage reflection and dialogue on the ethical dimensions of executive compensation. We consider the perspectives of various stakeholders, including shareholders, employees, and society at large, and discuss the importance of designing compensation packages that align with broader social and organizational values.
Join us as we delve into the multifaceted world of executive compensation, analyzing different models, considerations, and ethical implications. Together, let us gain a deeper understanding of the intricacies surrounding corporate remuneration and explore ways to promote fairness, accountability, and long-term sustainable growth.
This case examines seven commonly accepted myths about corporate governance. How can we expect managerial behavior and firm performance to improve, if practitioners continue to rely on myths rather than facts to guide their decisions?
Week One Discussion 500 Word Min.This weeks discussion covers .docxhelzerpatrina
Week One Discussion: 500 Word Min.
This week's discussion covers HRD Skill requirements for managers.
Before entering the discussion board, please review pages 16 - 19 in the course text. (Pictures Below)
Question:“What are the core competencies or skills an HRD manager must have, and how are they acquired? “
Week One
Discussion
:
500 Word Min.
This week's discussion covers HRD Skill requirements for managers.
Before entering the discussion board, please review pages 16
-
19 in the course text
.
(Pictures Below)
Question:
“What
are the core competencies or skills an HRD manager must have, and how are they acquired
?
“
Week One Discussion: 500 Word Min.
This week's discussion covers HRD Skill requirements for managers.
Before entering the discussion board, please review pages 16 - 19 in the course text. (Pictures Below)
Question: “What are the core competencies or skills an HRD manager must have, and how are they acquired? “
MHR 6901, Compensation Management 1
Course Learning Outcomes for Unit VI
Upon completion of this unit, students should be able to:
5. Explain workers’ compensation.
5.1 Convince others that executive compensation is too high or is just right.
5.2 Identify compensation rules that apply to the flexible workforce.
Course/Unit
Learning Outcomes
Learning Activity
5.1 Unit VI Essay
5.2 Unit VI Quiz
Reading Assignment
Chapter 11: Compensating Executives
Chapter 12: Compensating the Flexible Workforce: Contingent Employees and Flexible Work Schedules
Unit Lesson
So far in this course, we have talked about how compensation is used and the components of a
compensation system. Let us review these a bit before we move into compensating executives.
Typically, compensation is used to recruit and retain highly qualified employees. The organization’s business
strategy (lead, lag, or match strategy) determines how the organization recruits and retains employees. A
good compensation system also increases morale or at least maintains employee satisfaction. As mentioned
earlier in the course, compensation systems include wages and benefits. A good compensation system is one
that evaluates the employees’ needs and makes adjustments, where possible, to meet those needs.
Employees who have their needs satisfied are more likely to be productive and loyal to the organization,
which, in turn, reduces costs for the organization. This is great for the average worker, but what about the
organization’s executives? Executive compensation is a challenge for most organizations and is a highly
controversial subject, especially after the government bailouts in 2008 and 2009.
Executive compensation is different than that for most salary or hourly employees and can consist of a variety
of options. It is generally focused on generating profits and long-term growth and is considered contingent
compensation, which means that the pay is structured to reward or pay based on th ...
d
CHAPTER EIGHT
Compensation Programs
CHAPTER OUTLINE
Compensation Management
Legal Aspects of Compensation Management
Federal Legislation
State Legislation
Local Legislation
Direct Financial Compensation
Salaries
Wages
Incentives and Bonuses
Tips
Indirect Financial Compensation
Mandatory Benefits
Voluntary Benefits
Other Voluntary Benefits
Nonfinancial Compensation
Human Resources Terms
For Your Consideration
Case Study: Human Resources Management in Action
Internet Activities
CHECKLIST OF CHAPTER LEARNING OBJECTIVES
As a result of satisfactory completion of this chapter, readers will be able to:
1. Describe the differences between extrinsic and intrinsic rewards as they relate
to employee compensation programs.
2. Explain how compensation programs are affected by federal, state, and
local laws.
3. List and describe the most common forms of direct financial compensation.
4. List and describe the most common forms of indirect financial compensation.
5. List and describe some of the most common forms of nonfinancial compensation.
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264 CHAPTER 8 ! Compensation Programs
Impact on Human Resources Management
Despite arguments to the contrary, pay is not the central issue responsible for attract-ing and retaining most employees. Pay is only one of a variety of factors that
impact an employee’s willingness to work. Worker pay is, however, critically important
to employees and employers alike, because it affects so many other business issues.
In general, workers who feel they are unfairly paid will, if possible, seek jobs
they believe more equitably reward their efforts. Alternatively, employers who pay
their employees significantly more than other employers may find their operating
costs are too high to allow them to stay competitive and achieve the profits they
need to stay in business. Unfortunately for HR managers, elusive concepts such as
fair, equitable, and competitive defy unanimous agreement. As a result, the chal-
lenge faced by HR managers is to design and manage compensation systems that are
simultaneously perceived as reasonable by both employees and employers. The best
of HR managers actually go one step further and use their compensation programs
as an essential tool for attracting and retaining excellent workers, as well as maxi-
mizing profits for their employers.
It is important to realize that people rarely are attracted to, or leave, a job for
money alone. Instead, they are attracted or leave for career advancement, new chal-
lenges, lack of appreciation by the company, inability to have an impact, coworker con-
flict, job insecurity, family matters, and a variety of other factors. This is not to imply
that pay is unimportant to workers at all levels; it is critically important.
Ten Myths of “Say On Pay”
Authors: Professor David F. Larcker, Stanford Graduate School of Business; Allan McCall, co-founder of Compensia and currently a PhD candidate at the Stanford GSB; Gaizka Ormazabal, Assistant Professor of Accounting at IESE Business School at the University of Navarra; and Brian Tayan, Researcher, Corporate Governance Research Program, Stanford GSB.
Published: July 28, 2012
Say on pay is the practice of granting shareholders the right to vote on a company’s executive compensation program at the annual shareholder meeting. Under the Dodd-Frank Act of 2010, publicly traded companies in the U.S. are required to adopt say on pay. Advocates of this approach believe that say on pay will increase the accountability of corporate directors and lead to improved compensation practices.
In recent years, several myths have come to be accepted by the media and governance experts. These myths include the beliefs that:
There is only one approach to “say on pay”
All shareholders want the right to vote on executive compensation
Say on pay reduces executive compensation levels Pay plans are a failure if they do not receive high shareholder support
Say on pay improves “pay for performance”
Plain-vanilla equity awards are not performance-based
Discretionary bonuses should not be allowed
Shareholders should reject nonstandard benefits
Boards should adjust pay plans to satisfy dissatisfied shareholders
Proxy advisory firm recommendations for say on pay are correct
We examine each of these myths in the context of the research evidence and explain why they are incorrect.
We ask:
* Should the U.S. rescind the requirement for mandatory say on pay and return to a voluntary regime?
Read the attached Closer Look and let us know what you think!
To receive monthly alerts about the Closer Look series, please email the Stanford Corporate Governance Research Program at corpgovernance@gsb.stanford.edu. You can also follow more corporate governance
This document summarizes a regression analysis conducted by Jay Gajjar and Matthew Jacques to determine the factors that impact CEO compensation. They collected data from 30 Dow Jones companies from 2008-2011, during and after the recession. They found company performance factors like revenue, return on assets, average stock price, and earnings per share had a significant impact on determining CEO compensation. They conducted the analysis to examine how company performance during the recession affected CEO salaries.
B2B payments are rapidly changing. Find out the 5 key questions you need to be asking yourself to be sure you are mastering B2B payments today. Learn more at www.BlueSnap.com.
Company Valuation webinar series - Tuesday, 4 June 2024FelixPerez547899
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The Evolution and Impact of OTT Platforms: A Deep Dive into the Future of Ent...ABHILASH DUTTA
This presentation provides a thorough examination of Over-the-Top (OTT) platforms, focusing on their development and substantial influence on the entertainment industry, with a particular emphasis on the Indian market.We begin with an introduction to OTT platforms, defining them as streaming services that deliver content directly over the internet, bypassing traditional broadcast channels. These platforms offer a variety of content, including movies, TV shows, and original productions, allowing users to access content on-demand across multiple devices.The historical context covers the early days of streaming, starting with Netflix's inception in 1997 as a DVD rental service and its transition to streaming in 2007. The presentation also highlights India's television journey, from the launch of Doordarshan in 1959 to the introduction of Direct-to-Home (DTH) satellite television in 2000, which expanded viewing choices and set the stage for the rise of OTT platforms like Big Flix, Ditto TV, Sony LIV, Hotstar, and Netflix. The business models of OTT platforms are explored in detail. Subscription Video on Demand (SVOD) models, exemplified by Netflix and Amazon Prime Video, offer unlimited content access for a monthly fee. Transactional Video on Demand (TVOD) models, like iTunes and Sky Box Office, allow users to pay for individual pieces of content. Advertising-Based Video on Demand (AVOD) models, such as YouTube and Facebook Watch, provide free content supported by advertisements. Hybrid models combine elements of SVOD and AVOD, offering flexibility to cater to diverse audience preferences.
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The impact of OTT platforms on the Bollywood film industry is significant. The competition for viewers has led to a decrease in cinema ticket sales, affecting the revenue of Bollywood films that traditionally rely on theatrical releases. Additionally, OTT platforms now pay less for film rights due to the uncertain success of films in cinemas.
Looking ahead, the future of OTT in India appears promising. The market is expected to grow by 20% annually, reaching a value of ₹1200 billion by the end of the decade. The increasing availability of affordable smartphones and internet access will drive this growth, making OTT platforms a primary source of entertainment for many viewers.
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Unveiling the Dynamic Personalities, Key Dates, and Horoscope Insights: Gemin...my Pandit
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1. Assignment: Question 4
It has been proposed that HR managers should be more involved with compensation
committees charged with determining executive pay packages. In light of this argument,
argue if executive pay levels are unreasonable. Use examples to illustrate your argument,
what measures are available to make executives more accountable? How HR should be
involved in determining pay levels?
The landscape of business and financial markets has evolved over the years. In particular, the
subject of compensation is becoming an issue prevalent across all spectrum of society. Thus, it
been proposed that Human Resource Managers should be more involved with compensation
committees charged with determining executive pay packages. For this reason, this essay shall
justify the argument of unreasonable executive pay levels. Secondly, outline the measures
available to make executives more accountable to stakeholders. Finally, to state the involvement
of HR in determining executive pay, bonuses, perks and so forth.
The issue of executive compensation is a very delicate subject with its own intricacies. To begin
with, it is important to understand the basic definition of who is an ‘Executive’ in organizational
context. Furthermore, to determine the basis by which these ‘Executive(s)’ are compensated for
their service. By understanding the background of Executive Compensation then and only, can
we provide support for the unreasonable executive compensation package(s). The term
‘Executive’according to Perkins (2009, pg. 149) ‘is someone in an organization’s senior
management group employed at corporate level’, more specifically pepper (2006, pg. 5)
describes executives as “responsible for defining and executing a company’s strategy, who
through their actions are capable of directly affecting (positively or negatively) the company’s
profits, share price, reputation, market position and so forth”.The aforementioned definition
establishes executives as Chief Executive Officers for which this argument will focus on.
Furthermore, there are five basic components of executive pay packages as stated by Milkovich
et al. (2011), these are; base pay, bonuses, perks, short term bonus and long term incentives. A
base pay is the established minimum salary that an employee receives for his/her designated
position although the base pay varies according to the position one is designated to. Exorbitant
compensation is largely recorded in CEO’s position, for instance, Milkovich et al (2011) noted
that Robert Iger, the CEO of Disney had total compensation of USD$51 million. The base pay
determined was USD$2 million and with a bonus of USD$14 million. In addition, he also
2. received a massive USD$34 million in stock options. The second component of compensation is
bonus package which exist in the form of indemnity, disability insurance, social security plans
and so on, and for this, executives typically receive higher benefit than most other exempt
employees. Furthermore, Perquisites or ‘Perks’ are becoming an evident part of compensation.
These perks according to Milkovichet al (2011) are designed to satisfy unique needs and
preferences. For instance, if James Bernhard CEO of the Shaw group dies, his family will receive
perk pays of up to USD$18 million. Equally, William Weldon, CEO of Johnson & Johnson, got
USD$154,000 of company jet use and USD$26,000 for a car and driver, (Milkovichet al,
2011.pg. 485). Another component of compensation is the bonus of executives which are
intended to stimulate better short term performance. For instance, American Airline executive
were paid as much as USD$2 million after its shares jumped from USD$1 to USD$20, owing
heavily to employee givebacks (Milkovichet al, 2011. Pg.482).finally, long term incentives in
the form of stock options have a built-in incentive for executives to strive for long term
success.These components are important as they form the foundation of executive pay.
The argument of unreasonable executive compensation is justified on the grounds that certain
payouts does not reflect Pay-on-performance, secondly, to a certain extent it does not mirror the
prevailing market value and/or profitability of the organization.Finally, it is most unethical and
inequitable in every respect for a single person to receive such payments under current economic
elements. Firstly, Pay-on-performance compensation is the linkage of wages to executive
performance. The idea is, if the company’s executive performance exceeds stakeholders’
expectations bonuses and stock payout will consequently follow. However, in recent decade
most payouts are done without proper justification; meaning that it is not reflective of their
performance which in this case is the poor performance of the company. For
example,EthicsWorld(Anon, 2008)reported that in 2007Countrywide lost $1.6 billion and its
stock lost 80% of its value. Merrill Lynch’s stock lost 45% of its stock worth $10 billion.
Citigroup also lost $10 billion and its stock lost 48% of its value. In spite of substantial losses,
the CEOs were still remunerated considerable amounts. Accordingly, in the case of Merrill
Lynch’s stock wipeout its then CEO Stanly O’Neal was reported to have been eligible to
USD$161 million in retirement package. Moreover, in 2007 the companyreportedly paid
USD$15.9 billion of compensation and benefits, exceeding the company's revenue by USD$4.6
billion. It is in this regard that such compensation was unreasonable and unsubstantiated and
3. comes at a time when New York based companies were cutting back on job due to the collapse
of the US mortgage market. Secondly, exorbitant compensation may fail to reflect the conditions
of market forces as such presents a degree of unreasonable compensation package. Certain
organizations align their internal pay structure according to competitor’s decisions based on the
market. Milkovichet al (2011) presumed that fairness is echoed by market rates. However, the
bone of contention lies in the question of whether an executives pay is truly reflective of the
company’s market value and/or the profitability of the company. For instance, Intel’s CEO Paul
Ottelini’s compensation doubled in 2007 and his salary capped at USD$770,000. This is despite
the dramatic drop in Intel’s stock by $9 per share to $25 per share (Milkovichet al, 2011. pg.
478). In addition to that, the company’s earnings and market shares have also declined.In light of
this supporting argument it should be made certain the degree by which compensation proves
unreasonable, so that the organization can align its priorities and better reflect value created for
money. Failure to do this can have serious implications to the organizations success. Finally, it is
most unethical and inequitable for executive to be paid so much at the expense of others. This is
Unethical in the sense that, executives like the CEO is paid ‘top money’ in the midst of the
organizations restructure plans or downsizing period. An example would be the Pacific Brands
Crisis in Australia that led to the sacking of 1850 Australian workers. According to
schermerhorn et al (2011, pp. 55-56), Pacific Brands is an Australian Company that
manufactures international brands like bonds, berlei, hard yakka, holeproof, firefighters uniform
and so forth. Its values as stated in their annual report are flexibility, quality, speed and ‘ethical
responsibility’. Moreover, schermerhornet al (2011, p. 56) went on to state that the company
was moving its manufacturing plants to china, where cheaper labour is readily available. In the
midst of this entire furor, its CEO Sue Morphett’s pay rose from AUD$680,000 to AUD$1.8
million but although it does not register in the league of highly paid executive. It nonetheless,
sparked outrage among Australians due to the loss of significant number of jobs. In analyzing
this case, the value of ‘ethical responsibility’ has been ignored. There is no way to ascertain the
validity of her pay increment in light of the sacking of 1850 workers. As such it is argued that
there was a high degree of unethical responsibility displayed regarding compensation as such,
warrants justification of unreasonable compensation awarded to the CEO Sue Morphett.
Nevertheless, there are measures which are available to make executives more accountable to the
public and to its key stakeholder(s). Accountability as a vital element of trust can be addressed
4. by the organization. To begin with accountability according to the Oxford English Dictionary
(2002) is defined as someone who is responsible for or required to account for ones’ conduct. It
is simply referring to someone in a position where he/she is answerable to a group of people.
Since executives like the CEO’s are involved in the strategic planning and direction of the
company. They must fully disclose the details of company’s expenditure and justify provision of
Compensation so that the company’s stakeholders are fully aware on how their money is spent.
The disclosure of organizations operational, financial and quality performance as Robert and
Conners (1998) put it; can be achieved through, town meetings, focus groups and use of the
media to disseminate important updates regarding projects that the organization has or is
planning to undertake. Secondly, the composition of board executives should reflect a
representation of the diversity of the social, political, gender, age, and economic background of
people so that a balanced community-wide perspective is considered during the decision-making
process. Thirdly, the implementation of ‘Clawbacks’ provision, which requires executives to pay
back excessive incentive pay in the event of an accounting restatement, where more recently
board executives are trying to prevent fraud and other accounting errors by tying pay to
performance (DeHann, E. et al,2011). Accordingly, DeHann et al (2011) concluded in their
analysis of 300 firms that Clawbacks develop the accuracy of financial statements and increase
investor trust. Any accounting misstatement intentional or not sends a firm’s stock price
tumbling and for this, Clawbacks provision ensures a reduction in the risk of restatement by
making executives repay fraudulent performance-based compensation, thereby decreasing the
expected benefit to executives from overstated financial statements. Finally, for effective
accountability of executives, firms should compensate top executives according to a value based
system; whereby they are paid on the basis of ‘flow on return’ achieved by the executive
concerned.
Human Resource personnel play a key role in organizations work processes. In light of this
perspective, Human Resources should be involved more in the determination of executive
compensation. However, according to CNS (2008) too much emphasis is placed on the softer
sciences of Human Resources selection, recruitment, training and development rather than
determining the wages of executives. Their work in this area as stated by CNS (2008) is very
much limited to helping consultants with the paperwork. To mitigate this weakness, HR could
play a vital role in assisting executives understand how their compensation is being determined,
5. that’s if the company’s compensation policy is determined on a subjective criterion rather than
objective performance goal. This subjective basis is one way in which goals are set so that they
can be easily achieved by the organization. Secondly, Human Resource Managers can aid their
company determine the type of performance metrics to use, to better evaluate executive
performance. By not getting involved in executive compensation. Human Resource executives
are losing the opportunity to influence the company’s strategy in a key area they could
understand completely; leadership development and succession planning. Thirdly, According to
Meisinger S (2006), Human Resource professionals could provide compensation boards with
figures on the company’s overall compensation structure, examining industry best practices, and,
inmost instances, develop pay philosophies and designing executive compensation plans. Finally,
HR professionals according to Meisinger S (2006) are referred for the purpose of incorporating
the various strata of executive-level compensation, compensation-legal compliance, uniformity
in pay philosophies, benefits and perks-to ensure that it is on par with the organizations
performance objectives and ethical standards. Equally, Meisinger S (2006) added that the debate
over disproportionate executive compensation and the condition for greater financial
transparency have led organizations to depend on Human Resource personnel for this critical
function. Therefore HR as a critical component of organizations success must be more proactive
in the determination of executive compensation. By failing to do this, HR is ignoring a major
part of its role.
In Conclusion, it can be argued that executive compensations are unjustified in many respects.
The exorbitant compensation packages as seen in the case study examples are not reflective of
the performance of executives, however lacking it may be. In spite of this, there are always
measures of accountability for which this essay has provided in the form of disclosure of
executive interests and so forth. In addition, Human Resource professionals should be more
involved in the formulation of executive pay and bonuses to ensure accountability and
transparency in the running of the organization and more importantly, the determination of
compensation at all levels of the organizations hierarchy. It is therefore recommended that any
such compensation should be subjected to a set of stringent guidelines that ensure a pay-for-
value package. Moreover, executives and top level managers must be held accountable in the day
to day affairs of the organization. By failing to take heed of this arguments organizations are
paving the way for corrupt practices and other dishonest behaviors. (word count: 2062)
6. BIBLIOGRAPHY
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