COMPENSATION CH. 1

The CEO’s compensation should be set on how well the firm performs and should be awarded based on the performance of the stocks in the long run. It is easier to measure performance by the growth rate in the profits that have been reported since intrinsic value cannot be fully

Compensation systems can take on many forms, all of which have positives and negatives related to it. However, certain components are noted to be determinants of solid compensation plans. One agreement of a solid compensation system is the use of incentives. “Clearly a successful companies set objectives that will provide incentives to increase profitability” (Needles & Powers, 2011). Incentive bonuses should be measures that the company finds important to long-term growth. According to Needles & Powers (2011) the most successful companies long term focused on profitability measures. For large for-profit firms, compensation programs should offer stock options. The interweaving between the market value of a company’s stock and company’s performance both motivate and increase compensation to employees As the market value of the stock goes up, the difference between the option price and the market price grows, which increases the amount of compensation” (Needles & Powers, 2011). Conclusively, a compensation plan should serve all stakeholders, be simple, group employees properly, reflect company culture and values, and be flexible (Davis & Hardy, 1999; The Basics of a Compensation Program).

My research below will start with salary compensation which can easily be defined as a set monetary amount that an employee receives for the work that they do based on their specific job classification/coding only. I’ll follow that with performance-based compensation which pays and rewards employees based on their individual performance which allows for individual growth. Lastly I’ll provide research on longevity pay which focuses on additional pay or wage adjustments based solely on an employee’s length of service.

Purpose: In Weeks 3 and 5, you submitted information to help you in completing the final project. Feedback was provided to assist you in maximizing points earned on this final paper. To properly complete this final project, you must include the feedback provided to apply to this final paper. The purpose of this assignment is to apply your critical thinking skills in completing the employee process from job analysis to compensation based on performance. You are now going to

2.Shareholders want high long-term profits. Managers want job security and wonderful perks and amenities. Since risk and return tend to be positively related, managers may wish to avoid risks that shareholders want the managers to undertake. To encourage managers to take on risks, compensation committees can place a greater weight of their compensation on long-term incentives such as stock, options to buy stock, and bonus based on surpassing the performance of comparable firms over several years. When all

The term compensation refers to all forms of financial returns and tangible benefits that employees receive in exchange for their time, talents, efforts, performance, and results (Bernardin & Russell, 2013) Presumably, employees are motivated by the compensation they receive in all combinations to include their benefits packages. Naturally, employees want to be able to take care of their family to include having good medical coverage and other related benefits. Equity is said to occur when a person perceives that the ratio of his outcomes to his inputs is equal to other’s outcome/input ratio (Salvendy, 1976). Of course, employees want more money, and companies want more work out of each employee. With the cost of benefits like health insurance continuing to rise, companies have to take the higher cost of benefits into consideration when implementing pay

A well-articulated compensation philosophy drives organizational success by aligning pay and other rewards with business strategy. It provides the foundation for plan design and administration and anchors current and future plans to the company's culture and values (Kaplan, 2006, p.32). Recognizing and rewarding achievement is the cornerstone of the company A’s compensation philosophy. The mission of the company is to attract, select, place and promote all individuals based on their qualifications. The company believes that performance-based compensation helps attract, develop and retain talented professionals. In addition to base pay which based upon local market conditions and targeted to be above market, the company provides the following types of potential compensation to reward performance:

It was reasonable for a CEO’s compensation to increase as the company expanded and became a larger entity, and the newly-granted shares and increasing stock options further aligned the CEO’s personal interests with those of the company and shareholders. In this sense, the second compensation package was also well-structured and not excessive. Seeing Sunbeam’s revenue rising and stock price climbing steeply upwards, Sunbeam’s shareholders and directors were fully convinced by Dunlap’s leadership, so they might perceive the increase in compensation amount necessary to retain and better motivate Dunlap to enhance the company’s value. Nonetheless, they neglected the fact that the increased portion of the equity-based compensation also further motivated the CEO’s dangerous behaviors pertaining to improper earnings management.

As Director of Human Resources for Wilson Bros, the conclusions that I draw with respect to the status of the company’s compensation strategies is that they lack security for their employee’s compensation and lack flexibility to the changing economy, competitive environment, and growing organizational needs.

Workers’ Compensation is a disability insurance purchased by the Company. This insurance covers workplace injuries or work-related illnesses in accordance with state and federal laws.

“The importance of compensation has a lot to do with how the business is organized,” because at the end of the year, the bonus is “eat-what-you-kill. 267” One thing that Ho forgot to mention is how the job insecurity could be fixed because it is a major concern for

127). Such propose may be of good intention, but it is clearly premature. Since not all effort by employees may pay off in the near future, such as research. In that case, stock-based compensation would be a good motivator, since it align the interest of the employees and that of the company in the long run. Yet Martin argues that instead of resorting to stock-based compensation, companies should design a reality-based compensation with more creativity that would take into consideration future revenues. For instance, Martin argues, the compensation could be delivered in the form of royalty or licensing fee. Such method may seem to be reasonable and sensible, but only theoretically. As a matter of fact, not all work could be recognized in terms of royalty and patent. For example, a significant part of human resource managers’ work is hard to measure quantitatively, making it unpractical to calculate the compensation based on their work results. Given that spend much time and effort in developing a reality-based compensation system may well not be cost effective, stock-based compensation would be the optimal option for

Given the effect a CEO can have on a company's success, we can understand why their compensation packages

Many Americans have fallen prey or victim to the horrific acts of violent crimes that plagues our society. Violent crimes or criminal acts of violence’s are characteristically carried out by individuals who are fueled with hatred and induced with cruel disregard for others. Consequently, when such individual commits a violent act, more than often the resulting outcome leaves behind traumatized victims, grieving family members, anxious communities, and perhaps a morning nation to senseless deaths. However, this paper will focus on how victims and grieving family members are compensated, the process they should follow what programs and recovery.

Pivotal in that philosophy development is how and to what extent pay will be tied to specific types of performance.  This issue will not be treated the same in every organization.  However, every business should be able to identify certain performance objectives it wants its workforce to fulfill and the financial outcome that will be achieved if that result is attained.  Such a projection can be translated into an increased shareholder value figure.  (The VisionLink Advisory Group)