Essays on Executive Compensation

In every organization that intends to grow, there are structures and systems put in place to ensure posterity of the company and survival. The aspect triggers the incorporation of multiple people in the management thereby creating a compensation, benefits, reward and recognition headache for the human resource department. Blossoms Up! is no different. It is in a dilemma of how to balance their resources amongst top executives.

COMPENSATION

Blossoms Up! is looking to hire a Vice-President who will be in charge of operations. It goes without saying that the job has a string of responsibilities which must be compensated proportionately. ...

Milestone I

Apple Inc. was founded on April 1, 1976, which makes it 40 years old. There is something to say about a company that has been around for that long; they must be doing something right. There were three different kinds of computers starting with the Apple I, Apple II and the Macintosh. The Apple I had a typewriter like keyboard with the ability to connect to the TV for the screen. These were all built by hand. The Apple II arrived in April, 1977 and with this came color graphics and a tape based machine. Then in 1984 Macintosh ...

Role of Ethics in Organization Performance

Introduction The current level of executive compensation has raised critical questions and concerns regarding the ethical considerations and implication of such compensation. This paper aims to explain this ethical aspect of the executive compensation. Also, it outlines some of the individual and government approaches to revise the compensation system. The second section of the paper analyzes the role of Sarbanes-Oxley Act in regulating executive compensation levels. This section explains various measures enacted by the act and assess their nature of strictness in addressing this ethical concern.

Section 1

Primarily, a major ethical concern relates to the high amount of executive salary ...

Ethics and Governance

The concepts of ethics and corporate governance are unceasingly becoming importance in the modern day organizations as they play a great role in addressing key issues. In that respect, the two concepts take varying approaches and their application varies among firms (Elms et al., 2010). Regarding the ethics issue, it relates to the norms and morality of a given community and what is right or wrong draws from those norms and morality values. In the modern world, the issues of ethics have been popularized given the increased cases of organizations that have been judged on the ethical basis (Cannon, ...

Financialization is the process by which financial institutions increase in size and influence on the overall economy by strengthening the country’s financial sector. The process occurs in countries that are perceived to have shifted their economies from industrial capitalism. It has been occurring in the United States and other parts of the world since the 1970s. The process has affected both the macro economy and the micro-economy by changing the manner in which financial institutions are structured and operate in the entire economy. The United States has experienced high levels of financialization through the loss of manufacturing and ...

Introduction

The report presents discussion and analysis of compensation strategies of Nucor Corporation. The organizational structure significantly impacts the compensation system of an organization that affects its ability to attain strategic goals. If the compensation to executives is not aligned with the organizational culture then it may lead to adverse impact on the firm’s performance and lead to other consequences. Several studies indicate that the organizational culture has a significant impact on compensation as well as the firm’s performance. The firms offer different types of compensation to their executives that may affect the compensation structure. However, they are ...

- Productivity in the workplace is affected by the level of motivation given to the employees. Employees expect to be motivated through monetary and non-monetary incentives that make them feel appreciated at the workplace. From the video ‘A motivation convention in Chicago’ mike and other people he managed to interview present different views on the use of cash and non-cash incentives in motivating the employees. Motivating employees requires giving them more than cash as a way of appreciating their jobs. This means that employees prefer appreciation and recognition of their efforts through being given non-cash tangible materials such as a ...

Several people in different parts of the world in both developed and developing countries go without or with little food every day. This is attributed to the fact that there exists not enough food to supply the needs of the people in these countries. As result of factors such as war, political feuds, poor economic prosperity and poor infrastructure, hunger and poverty are generally witnessed in such countries. Therefore their use of genetically modified food is seen as a source of relief to the starving population. It has to be understood that the use of Genetically Modified food may not ...

While growing up, everyone has a vision and a dream of what they would love to be identified with as their profession. I have not been left out in the dream as well as I have always admired the nursing profession since I was a little child. The desire to become a nurse still burns in me and I believe I will achieve my dream of the same and aspire to greater heights in the profession.

I have always wanted to do something that really will influence a lot of people in a very dire need of my service, services that may not matter a whole ...

Why are benefits strategically important to employers and what are some strategic considerations.

The Strategic benefits are important to employees as well as for employers in many ways, for example, when an employer has a strong benefits plan with competitive remuneration then ultimately it will benefit the employer to attract more talented pool of candidates in the form of potential employees. Organizations want to attract the best people in the market so benefits can help in attracting high caliber employees and ultimately, it will benefit strategically the employers. Benefits can maximize the performance of the business that is strategically important to employers. Benefits are important to employers because they can build a loyal relationship with ...

a) Return on investment relative to industry The J.P Morgan Chase and Co. Investment banking division provides a variety of investment banking services and products such as security's underwriting in debt and equity markets, structure advisory services and corporate strategy, risk management, trading platforms for institutional clients in cash securities (Behery and Tarek 131). Its client base includes governments, corporations, institutional investors and financial institutions. b) Board issues The company Board provides experience, judgment, independence and accountability for its shareholders. Director independence is upheld in several ways, including restraining the number of officers sitting on the Board. Ten of 12 directors are ...

There are six main categories of corporate failure causes: poor strategic decisions, overexpansion, dominance of CEOs, greed, pride and power, failure of internal controls, and ineffective board of directors (Hamilton and Micklethwait, 2006). Business collapse can happen in cases where companies do not fully comprehend the relevant business drivers when they decide to expand to new lines of products and services, or meet the demands of additional geographic markets. These lead to poor strategic decisions because they fail to recognize the importance of risk management in their respective industries. They should be able to determine the overall impact ...

Introduction

Critics of executive compensation have brought up several controversies. Any individual involved with regular executive compensation such as CEOs and human resource heads should be in a position of answering any controversy-related questions, thoughtfully and knowledgeably. Organizations approach the executive compensation decisions in their own ways, in relation to the organization’s circumstances, beliefs and values. CEOs and trustees make decisions that they think are most appropriate for their organizations (Fuchita; et al. 2010). Trustees have the onus of governing executive compensation with the aim of making sure the decisions made are wise through community leaders that are well familiar ...

Introduction

Traditional budget making has been playing an important role in the business environment since the dawn of 1900 and is considered to be one of the major evaluators and key drivers of managerial performance in every organisation. It also plays a critical part in the designing as well as implementation elements that affect the organisation wide planning and control. Traditional budget making is the most powerful tool which has been in use for management control as it plays an essential role in the organisation’s corporate politics. It can also increase the authority and power of the senior or ...

1. Why is executive compensation important? How does it relate to a company’s values? It is important that managers have the skills and knowledge to deal with issues of corporate governance, ethics, economy, taxation, legal and financial needs of a company. The values of a company are unable to be successfully managed without expertise. Executive compensation must reflect high expertise to ensure that the values of a company are met. The best and brightest managers can lead a company in a more profitable direction. 2. What is “Say on Pay”? The general meaning of “Say on Pay” comes from corporate ...

Ideally, sleep out isn’t about participants the idea of what it feels like to be homeless or to paint the idea of homelessness to the participants although the situation leaves some little feel of how the situation could be and the challenges involved in the entire situation. We have to admit that there is no particular way that the attempt of single night, despite the situation of how cold or wet the night could be, can replace the helpless despondence and the harsh personal pain of being a true homeless person in any part of this globe. Therefore, ...

Health is an important factor in the life expectancy of individuals that constitute the working group of any nation. Improved health services increase life expectancy hence the need to protect the health of individuals at all cost in order to ensure their productivity. Health insurance increases the cost of health care by promoting demand. Insurance enables individuals to buy more health care services than they could if they had only ready cash or its equivalent. Despite the importance of health insurance, a large number of Americans lack coverage. Majority of Americans have the health insurance through their own, their spouse ...

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I believe education is important backbone in the economic development of many countries. Just as planning for harvest begins with sowing of a seed, education is very vital in the development of most countries and even the development of the individual’s life as a whole. Therefore, the development of countries and individual’s sense of awareness calls for education of the individual’s whole being. I believe the acquisition of skills through education is important in the acquisition and formation of the human capital. Therefore with the scholarship offered to me to acquire the education will be a strong investment on me ...

The industry has also embarked in massive airline partnerships in their sale of tickets to enable easier provision of services to over wide distances as they collaborate with various other airlines to cover more travelling distances. This makes it easier for the constantly increasing number of travelers to have their needs catered for. Since the airline’s image had taken a beating due to the culture prevailing in the organization, particularly among pilots, the carrier decided to go in for a revamp of its HR policies, according to experts. As a first step, the airline brought about a change in management. Chen ...

While working with this essay, I will touch on the major themes of the social security and insurance programs that Czech Republic has developed over the past. This will include areas of Social Security and Expenditures giving the historical perspectives in addition to the social security payments system that in Chile’s cases was originally pay as you go. The paper will also direct its spotlight on the distribution of income among the paper of varying ages especially the elderly and how the Social Security Taxes are structured to reflect this distribution of the age groups. The social security ...

Employee compensation in most cases refers to the cash benefits that individuals receive as an exchange of the services rendered to their employer. In most cases, at least in many countries, individuals earn a certain wage or salary due to the work they do to their employers. For example, in the United States, almost over 90% of the employees or what is considered the working population earns a salary of some form of wage. The compensation that is in form of cash often comprises the wages or the salary and in some cases may include the bonuses as well as the ...

Introduction

Employers use a variety of tools in a view to motivate their employees. They also apply the methods which are convenient to them in terms of applicability and cost. The various methods used are as follows.

Section 1: Forms of compensation

Wages and salaries This method is applied to a large extent by many organizations. The wages are usually paid on an hourly or daily basis (Pell, 2012). On the other hand, salaries are usually paid on a monthly basis. In the UAE, this method has been used to attract highly talented labor. This has been majorly observed in the technical industries such as engineering firms.

Bonuses and commission

These ...

Part I Key concepts of the article: How to Fix Executive Compensation, by Alex Edmunds

The article centres on the concept of managerial control at the executive level. The author begins by noting the fact that managers at the executive level deserve to be compensated. The author cautions that the centrality of compensation in terms of the send of packages or retirement perks should be appreciative of the long and short term interests of the company. The financial character of managerial control entails the evaluation of the compensation package. The author advocates for an approach that solves both the interests of the company and the interest of the executives. Striking a balance between two ...

Part I Key concepts of the article: How to Fix Executive Compensation, by Alex Edmunds

The article centres on the concept of managerial control at the executive level. The author begins by noting the fact that managers at the executive level deserve to be compensated. Through this, the author shows his appreciation of the role of compensation in employment circles. However, the author cautions that the centrality of compensation in terms of the send of packages or retirement perks should be appreciative of the long and short term interests of the company. In that vein, the author suggest that firms should leverage on the compensation package to the executives for purposes of demonstrating lessons ...

The Current state of literature

The study is going to study the relationship between the Chief Executive Officer incentives and the performance of the company. Hamadi in 2011 investigated on, how the CEO incentives are calculated, and the effect the incentives have on the firm’s performance. He carried out the analysis using data from 231 public companies which are listed in the stock exchange. His aim was to find out if the incentives given to the CEO have any effect on the firm performance and the shareholders wealth. The shareholders wealth is the dividends the shareholders are entitled to at the end ...

The global financial crisis that began unfolding in 2007 has focused attention once again on the consequences of bank managers’ unprofitable risk taking. In retrospect, it seems clear that many banks took excessive risks in the mid-2000s. Responding to recent losses suffered by U.S. banks and anticipated costs to U.S. taxpayers, many observers have argued that poorly structured bank executive compensation led to excessive risk taking by bank managers. President Barack Obama and Treasury Secretary Timothy Geithner have both made this claim. Financial institutions that received “exceptional” TARP assistance by now are subject to increased executive compensation regulation. Finally, ...

There are three corporate governance mechanisms namely; the board of directors, Ownership concentration, and the executive compensation (Dierdorff et al 972).

Ownership Concentration Ownership concentration gets its basis on the number of shareholders in a company and the amount of shares owned. A noteworthy percentage of shareholders ownership influences the decisions made by the top executives. A concentrated ownership offers a dynamic and effectual monitoring of the top executives unlike the diffuse ownership, which is weak in examining and controlling the decisions made by the top management (Dierdorff et al 972). In the United States, institutional owners for example CalPERS have used their powers to oust incompetent CEOs.

Board of Directors

Board of directors is elected by the shareholders and comprises of both insiders ...

“CEO Pay and the Top 1%: How executive compensation and financial-sector have fueled income inequality”. This article by Mishel and Sabadish (2012) examined the role of executives and the financial sector in the growth of incomes of the top 1 percent. The authors recognized the distinct aspect of growing inequality in the US is the wage gap between the top earners and other earners. The unequal growth in earnings enjoyed by the executives is the key driver of the wage gap. The authors revealed that the earnings from 1979 to 2007of the top 0.1% grew by 362% and ...

Abstract

The way in which CEOs are paid today is often at odds with the actual success of the business, leaving many executives being well-paid even when their ideas and their business acumen fail. In the case of individuals like Michael Eisner, the CEO of Disney in the late 1980s through the early 2000s, he enjoyed unprecedented wealth and pay, despite a less-than-stellar output and profits for the company. Though his pay was justified at the time, due to the tumultuous period that Disney was encountering, his eventual mistakes and overabundance of power left him with too much pay and control ...

An Incentive Plan

Introduction An incentive plan can be described as a formal scheme that is used to encourage or promote the behavior or the actions of a specific group of people or an individual during a given period of time. These plans are mostly used by business managements in order to motivate the employees, retain customers and also to attract more sales. For incentive plan programs to be effective, all the aspects that influence behavior must first be identified which would include skills, motivation, an understanding of the goals, recognition, and also the ability of progress measurement.

Performance bonus

Performance bonus can be defined as a ...

Introduction

A good hiring and pay plan is essential for the success of any business establishment. If the plan is not good enough then it is likely to reduce on the productivity of the employees thus reducing the firm’s profitability. A pay plan for instance cannot be the same for all the employees in a given company. Therefore the payment for different employees has to be varied. Many companies are in the process of increasing the proportion of variable pay in their employee pay packets. Employers always want to incent and reward their employees while at the same time tying ...

Executive compensation is different from the compensation of other employees in that the salary and benefits are negotiated and written in a document known as the employment contract. In the employment contract, are figures of the compensation, the performance bonuses, and other relevant agreements, as well as the terms of employment. Basically, executive compensation comprises of the basic salary and all other bonuses. The bonuses include rewards and incentives meant to motivate the executives to work harder. The executive compensation may also include income protection guarantees, perquisites, and incentives such as stocks. The employees covered by the executive compensation are ...

Abstract

This paper tries to offer a summary of three key literatures, which have emerged within in the agency theory and corporate governance field since Jensen and Meckling’s (1976) pioneering piece of writing recommending their conjecture of the company. Within this paper an argument is offered as to why these predicaments occur inside the ‘nexus of contracts’ that Jensen and Meckling illustrate as portraying the contemporary company and how directors and shareholders may operate to manage these costs to make the most of company worth. The key pieces covering these parts where director’s attentions are probable to deviate from ...