Analysis Of The Payment Practices Between Companies, Executive Compensation Plans

1644 Words Apr 13th, 2016 7 Pages
While there is heterogeneity in the payment practices between companies, executive compensation plans must include four basic components: base salary, annual bonus tied to accounting performance or another agreed indicator between the parties, stock options and incentive plans long term (including restricted stock plans and performance plans based on accounting more exercise). Under the crossfire of public opinion, the bonus word became almost word, synonymous with unbridled greed, something to be fought. But despite all the weeping and gnashing of teeth the last two years, the variable compensation was off the list of fatal victims of the crisis. Capitalism still could not invent better way than the bonuses to reward those who deliver the best results. The problem was never in the bonus, but the distortions that led the system to fuel the crisis. The solution, therefore, would be to eliminate these distortions.
General Electric Company ended the year 2003 with strength in the market. According to reports, the company 's stock rose more than 24% in the previous year, and recently closed 2003 on a good note as well. During the last day of the year, on December 31, 2003, General Electric 's shares rose to a new 52-week high $ 31.49, indicating that interest in news transformation of the international conglomerate corporation remained as high as ever.
The annual salary of CEO of GE received an annual salary of $ 22 million last year. These are some examples of salaries that are…
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