Executive Compensation

In: Business and Management

Submitted By roxon123
Words 822
Pages 4
Session 9
Samstag, 6. September 2014 13:30

Session 9 Prep
Topic: CEO compensation
Reading • Résumé Pedro Matos, Darden Professor • Chapter 7 in Corporate Governance • Chapter 7 in Boards That Deliver • Bargain Bosses, American chief executives are not overpaid, The Economist • How to get paid like a U.S. CEO, Fortune • Executive Compensation

Corporate Governance: Chapter 7 - CEO Compensation
• Norms for CEO compensation ○ Proxy statements provide information on executive compensation and are distributed ahead of shareholder meetings ○ There is a positive correlation between firm size and total CEO compensation ○ The higher the CEO total compensation, the larger the percentage of non-cash compensation (bonus) • The Goal of executive compensation • What is good performance? ○ Current circumstances, its goals and the execution of its strategies ○ Compensation should include short- and long-term plans ○ Long-term: achieving strategic goals (e.g. financial) ○ Compensation/performance should be benchmarked against peers • Building a compensation plan ○ Peer comparison is the beginning, but should not be the only determinant of CEO compensation ○ Gradual rise of CEO compensation is due to the matching with competitive compensation as soon as one competitor increases compensation • Compensation mix ○ Base salary  Have average base salaries with at-risk copmensation when performance is superior ○ Fringe Benefits  30-50% of base salary  Medical and life insurance premiums, retirement costs ○ Perquisites  Clubs and expense accounts, Cars, airplans  If used properly, there are valid explanations, however, abuse is not uncommon ○ Bonus for short-term performance  Combination of individual performance (personal objectives) and corporate performance, very specific  Objectives may include: bring new product to market by a specific deadline, successful acquisition of…...

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基本事務所 | the six ethical principles of a professional organization | EMPiRE (45) - The Empire Strikes Start!! (Cass, Album, Ltd)