- Use the Internet or the Strayer Library to research common components of executive compensation plans. Next, examine these components and identify one (1) component that you deem essential to motivate executives to lead companies toward competitive advantage. Provide support as to why you chose that component.
- Popular press and media accounts generally suggest that executives are overpaid. Discuss two (2) principles underlying the argument in favor of high executive compensations and determine whether these principles are sound.
Respond to a classmate:
According to The Garner Group which helps companies place CEO’s in companies the five most essential elements to a compensation package is the base pay, benefits, short-term incentive compensation, long-term compensation, and executive perks. The one component I feel when choosing from above would be the long-term incentive compensation package. This I feel would be the way to motivate executives to excel in their position. Long-term compensation incentives are what the feel is the “golden handcuffs’ to keep from executives looking elsewhere. What it is a stock option, vesting requirments, performance objectives and opportunities for executives to earn some ownership in the company.
The underlying argument is that executives get paid too much however here is why I don’t agree with this. Companies that award executives with compensation in for the form of stocks or like I stated above long-term investments are providing an incentive for him or her to run the company well because they benefit from it, in the end, rewards the company and the shareholders. CEO’s and high executives are at the helm of the public companies and roles need to be adequately rewarded so they can attract suitable candidates who will steer companies in the right direction towards growth and development and you have to pay for it.