In: Business and Management. Executive Compensation: Do you get what you pay for? Some would say that top executives are not overpaid. This side of the argument is based on the premise that top executives are paid well, but not overpaid. What are the factors that might support a high executive compensation package?
Compensation for executive managers is different from compensation for other employees in most organizations. Executive compensation covers employees that include company presidents, chief executive officers CEOs , chief financial officers CFOs , vice presidents , occasionally directors, and other upper-level managers. These high-level employees are paid executive compensation. Executive compensation is different from compensation for lower-level employees. The salary and other benefits are negotiated and are documented in a customized employment contract. This is because the senior leaders of an organization come from positions in other organizations where they made top dollar as increasingly senior leaders.
Executive compensation cited as one of the most controversial point in the principle-agent relationship, has became a hot button in the existing economic environment and academic literature. In order to future understand the agency problem result from the executive compensation, it is necessary to understanding the concept of the executive compensation. The congress has determined that the executive compensation system is unreasonable during the crisis in s.
A properly crafted executive compensation plan not only ensures you attract and retain the talent your business requires, it also effectively links the incentives for your executive team to the strategy and priorities of the organization. An executive compensation plan needs to be thoughtfully prepared to ensure both short and long-term goals are considered. These six keys below will help your company to properly implement effective executive compensation strategies. A common mistake for incentive-based compensation is promising incentives that are not tied to specific metrics.