Company Case Study : Compensation Package Essays

Company Case Study : Compensation Package Essays

Length: 1057 words (3 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

When a company hires a new Chief Executive Officer (CEO), the company must decide how to compensate the CEO. There are many ways of compensating CEOs, and they all have advantages and disadvantages. These can include things such as salaries, stock options, bonuses, and other benefits. How the company decides to arrange all the things for its CEO can be very crucial to the company’s success. One of the most interesting decision the company must make is whether to give its CEO a golden parachute, and what the company decides to offer as a compensation package, can be one of the most important decision the board of a company makes.

Compensation packages are one of the biggest reasons a CEO would choose one job over a different job. Most CEOs, and people in general, want to make the most possible money from their job, so they will choose the job that allows for that. This means that for a company to get the best CEO, which in theory would mean the company would be the most profitable, the company needs to have the best compensation package. However, having a compensation package that is too high is also not good because it wastes money and may have negative effects on the company.

A salary is probably the most common compensation a CEO receives, and it is the simplest. Other common compensations include health insurance, retirement plans, and stock options. The first two are simple and shouldn’t vary all that much between companies. However, stock options can vary a lot between companies, and can be one of the biggest benefits to a CEO. Anything that ties a CEO’s compensation to the company’s performance is a good thing because, in general, a CEO will care more about how the company is doing if his or her compensation is tied to ...


... middle of paper ...


...to get a good CEO, but he or she may not be as motivated because he or she will be compensated the same no matter how well the company is doing.

The key to deciding a CEO’s compensation is balance. A company needs to balance performance based benefits with a good salary. However, being more toward the performance side is usually best. The reason for that is it makes the CEO more motivated, and since compensation is based on performance, if the company is doing bad, it will not have to break its self to pay its failing CEO. As for golden parachutes, they are probably not the best because in a way they pay a CEO to fire him or herself which is just a backwards concept. However, in some sectors where mergers are common, they are pretty much required to get a good CEO. Overall, a reasonable well balanced compensation that is in line with industry standards is the best.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

The Relationship Between Executive Compensation And The Sustainable Future Of The Respective Organizations

- The main objective of this study is to Identify and analyze the relationship between executive compensation and the sustainable future of the respective organizations as a result of granting these compensations. This is considered in a broader scale where not only the company but also the employees and the stakeholders of the company are considered. Before proceeding into details it is worthy to understand what an Executive compensation is. Executive compensation or executive pay is composed of the financial compensation and other non-financial awards received by an executive from their firm for their service to the organization....   [tags: Management, Executive compensation]

Better Essays
730 words (2.1 pages)

Corbin Pacific - Case Study Essay

- CORBIN - PACIFIC Summary 1.1 Executive Summary Corbin Pacific, Inc. is a California based company, whose mission is to produce best motorcycle accessories in the world through innovative designing and high quality manufacturing with a customer oriented approach. Mike Corbin, Founder and President of the company started this company back in 1968 by producing motorcycle seats in his garage. Over the past three decades, the company has come a long way. It now has more than 90 % market share in the motorcycle accessories....   [tags: Business Case Study]

Free Essays
1727 words (4.9 pages)

Walmart Compensation Package for its Employees Essay example

- ... The most beneficial is internal consistency, it defined each position, and employees are paid based on skill level and qualification. Internal consistency encourages trust with people; it is a sign that a system has been designed, and not patched together. When an employer pays the wages of the internal value of the each job, depending on the work performed the employee is getting paid for the service rendered. Typical factors are considered such as educational requirements, experience and overall responsibilities necessary for the job functions (Romanoff, Boehm, & Benson, 1986)....   [tags: business, market, competitors]

Better Essays
1820 words (5.2 pages)

HRM Strategies Needed by Janssen Pharmaceutical Companies to Achieve High Performance Work

- EXECUTIVE SUMMARY High Performance Work (HPW) is absolutely essential for the associations to manage the to a great degree aggressive markets. Absence of organisational effectiveness or techniques would absolutely push the association in the negative course. In this paper Leadership and Human Resource Management (HRM) ideas are contemplated for expanding the superior working of the Janssen Pharmaceuticals. The collaboration and HRM procedures utilized by the Janssen are assessed. The assessment is carried out on the premise of proper hypothetical models....   [tags: Janssen Pharmaceuticals Case Study]

Free Essays
2600 words (7.4 pages)

Kudler Fine Foods Case Study Essay

- Kudler Fine Foods Case Study Residents of the San Diego metropolitan area are fortunate to be able to patronize the local specialty food store known as Kudler Fine Foods. Founded by Kathy Kudler in June of 1998, Kudler Fine Foods is now three stores strong. Kudler Fine Foods are located in elite shopping centers. Guests will find the best and freshest domestic and imported gourmet items from the following categories: bakery and pastries, produce, meat and seafood, condiments and packaged foods, cheese and dairy and wine....   [tags: Business Management Strategy Analysis]

Free Essays
1096 words (3.1 pages)

The Debate Over CEO Compensation Essay

- This paper will discuss the reasons why CEOs are not being overpaid. It will apply the utilitarian ethical principle to many a few aspects to CEO compensation and whether or not it is justifiable for such pay. The paper will look at whether or not their performance is justifiable for the pay because they play such a big role in the livelihood of the company along with the principle agency theory and how it is being addressed for the benefit of the shareholders and others involved with the company, the supply and demand of the CEOs, and the paper will describe the comparison of other professions to help link the idea of CEOs being fairly compensated....   [tags: money, shareholders, company]

Better Essays
1342 words (3.8 pages)

Compensation Philosophy : Employee Compensation Essay

- Compensation philosophy is basically official statement recording the organization position about employee compensation. This explains the “why” of employee pay and produces a framework for stability. Employers can benefit from this if open about their compensation philosophy and having a proper pay strategy (SHRM, 2015). The executive team and the human resources department are the ones that usually develop the compensation philosophy’s. The compensation plan is based on different factors, for example, the organizations financial position, the salary information, the size of the company, and the level complexity in discovering qualified people based on the economy....   [tags: Employment, Employment compensation, Insurance]

Better Essays
782 words (2.2 pages)

Essay on Accounting for Compensation at a Company

- Re: Murray Compensation, Inc. Facts Murray Compensation, Inc. (Murray), an SEC registrant that provides payroll processing and benefit administration services to other companies, granted 100,000 “at-the-money” employee share options on January 1, 2006. The awards have a grant-date fair value of $6, vest at the end of the third year of service (cliff-vesting), and have an exercise price of $21. Subsequent to the awards being granted, the stock price has fallen significantly. On January 1, 2008, Murray decreased the exercise price on the stock options to $12....   [tags: Accounting Case Study]

Better Essays
815 words (2.3 pages)

HSBC In Argentina Essay

- Summary of the Case Study Profits at the global banking group HSBC have fallen after it made provisions of more than $1.1 billion to cover losses from the economic crisis in Argentina. The Argentine crisis accounted for $1.12 billion of the write-down - which was slightly higher than analysts had forecast. The figures were in line with analysts' expectations and this helped push shares in HSBC 59p higher to close at 837p. Last year Argentina descended into chaos as people protested against draconian policies introduced to try and avoid default on overseas debt and devaluation of the peso....   [tags: Business Case Study]

Free Essays
1995 words (5.7 pages)

Executive Compensation Essay

- For Sunan Pty Ltd to have a successful float, a detailed and well thought out compensation governance needs to be developed. The following recommendations have been built create a compensation package to help maximise shareholder interest for Sunan Pty Ltd. PRINCIPLES OF REMUNERATION Remuneration packages should be created to attract executives capable of motivating people, communicating a vision, and leading a company to success to achieving long-term shareholder value ***** Remuneration packages should reward success over short and long term periods with an emphasis on the long term ***** Remuneration packages should be fair to all stakeholders of the business REMUNERATION COMMITTEE T...   [tags: Business Compensation Payroll]

Free Essays
1211 words (3.5 pages)