Executive compensation

Executive compensation

  • Submitted By: keekee55
  • Date Submitted: 03/20/2014 5:13 PM
  • Category: Business
  • Words: 740
  • Page: 3

Discussion Questions:-
In one paragraph for each:-
Discuss the various components of executive compensation. 
How executive compensation set and what is are the roles of key individuals in the organization in setting compensation.
Discuss the various methods of assessing executive performance.
 

Executive compensation
Executive compensation can be defined as the financial and non monetary benefits provided to high level management in exchange for their work on behalf of an organization. It furthered stated that employees that usually benefit from this type of compensation packages are like corporate presidents, chief financial officers, managing directors, chief executive officers, and other senior executives. Often times within an organization the committee that deals with compensation or the compensation packages usually consider four major elements or components, which are in the executive compensation program and these are as follows:
Base salary: This is basically regarded as a fixed element of pay, thus it doesn’t not normally vary in relation to the company’s performance. Salaries normally give rise to the executive’s basic standard of living. It is also necessary for high and low performing firms to pay at the going market rate.
Short term incentives: This is usually awarded annually .The award opportunities also reflects the positions on the organizational chart of that company as it relates to the relationship in most cases with a higher opportunity to elative salary for higher-level positions and vice versa.
Long-term incentives: This type of incentive is normally refer to as grants or rewards where the payment is based on the performance for a period extended beyond a year.
Benefits or Perquisites: Here it is often difficult to quantify the benefits due to lack of reliability of data. These benefits may include but not limited to company car, club member ship, spouse travel, housing accommodation and much more.
It is also imperative...

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