Executive Compensation

Week 7 DQ 1 Executive Compensation In the udder salary of administrators, virtually soak up variable pay, a payment that fluctuates according to round level of operation. The use of compensation beyond base salary is think to motivate executives to make certain organizational performance goals, for example, specific profit levels, and reward them for reaching these goals. One very popular type of variable pay is the executive indemnity, which is a one- prison term payment tied to some short-run performance goal. The bonus may be base on any number of performance outcomes, ranging from judgments of executive performance by the board of directors, to levels of gild profits or market place shargon. more than or less all executives promptly receive some sort of bonus as a slice of their compensation package. In juvenile years, inducings grant become authorised for rewarding the performance of executives, and now defend up c standly one half of original executive compensation. Incentives are rewards that are linked to >specific long-term goals of the organization. The most common long-term incentive is the burgeon forth option, which either gives the executive free familiarity stock, or allows him or her to purchase company stock at a reduced price for a period of time.

These stocks become more valuable as the company improves financially, and therefore, ownership of stock is intended to encourage the executive to make the organization more profitable. Executives eject then sell these stocks at a later time when they have appreciated in value, therefore providing compensation beyond the employees tenure with the organization. Recent di scussion stories detailing company failures ! in which unethical accounting practices and ersatz inflation of stock prices caused lower-level employees to lose investments in company stock have raised concerns closely the ethics of granting large numbers of stock options to executives. The base salary, bonuses, incentives, and benefits for executives have raised serious questions about the...If you want to get a full essay, order it on our website: OrderEssay.net

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