Home Depot Corporate Governance Essay

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).

ITC Ltd.’s strategy plan for compliance with the current acceptable standards or norms relative to social responsibility today is well thought out, especially for a company that sells potentially dangerous products, and try to meet and listen to all demands and laws in place since the start of their business. Even though in 2014 a new bill was passed for the majority of companies to build accountability and also have the government looking over the private sector (Banerjee, 2013). “The CSR provision requires affected companies to spend at least 2 percent of their average net profits made in the preceding three years on CSR” (Banerjee, 2013). Even though this bill has caused a lot of uproar for companies, ITC has actually already been

2. the members of the board or compensation committee who were present during debate on the transaction, those who voted on it, and the votes cast by each board or committee member;

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 gave the right to the shareholders to be able to approve the executive compensation for a company, in this case the Kroger Corporation. However, this is only on an advisory basis which is nonbinding. Meaning, if Kroger so chooses, it may not follow the executive compensation decisions made by the shareholders. Ultimately, the power to set the executive compensation is given to the Compensation Committee. Kroger wishes to retain the best management possible, and it does so through competitive pay. Kroger believes that a significant amount of the pay should be based on performance and the proportion of responsibility held by the executive. They also believe compensation should

The statement explains the company’s compensation philosophy and what the compensation program centers around. According the company’s philosophy, the compensation for named executive officers is made up of three components; salary, stock options, and performance-based bonuses. The fourth proposal to vote on is proposed by a stockholder. Southwest Regional Council of Carpenters Pension fund who is the beneficial owners of less than 100 shares, proposes for a director election majority vote standard. The company lists reasons as to why that is not a good fit for the board and recommends shareholders to vote against the proposal. The proxy statement lists three other stockholder proposals to vote on, if they are presented at the upcoming annual meeting. The board recommends that the shareholders vote against all the three proposals and gives explanations for what is best for the

The second compensation package was not well designed nor did it help define what the corporate strategy would be. For a second time the compensation package focused on maximizing shareholder’s wealth and didn’t take into consideration the stakeholder’s position at all. Dunlap’s package was deeply weighted in company options ($3.75M). In fact it was weighted heavier than before. The stock grants were

In discharging its role, the Committee is empowered to inquire into any matter it considers appropriate to carry out its responsibilities, with access to all books, records, facilities and personnel of the Organization. The Committee shall have the power to retain outside counsel or other advisors to assist it in carrying out its activities. The Organization shall provide adequate resources to support the Committee’s activities, including compensation of the Organization’s counsel and other advisors retained by the Committee. The Committee shall have the sole authority to retain, compensate, direct, oversee and terminate counsel and other advisors hired to assist the Committee, who shall be accountable ultimately to the

What is your compensation committee’s current direction and role? What leadership topics are discussed with your committee? Is there opportunity to expand the committee’s agenda to help your organization more?

When approving compensation for directors, officers and employees, contractors, and any other compensation contract or arrangement, in addition to complying with the conflict of interest requirements and policies contained in the preceding and following sections of this article as well as the preceding paragraphs of this section of this article, the board or a duly constituted compensation committee of the board shall also comply with the following additional requirements and procedures:

Wendy’s has 5 board committees and their membership. The first one is Executive Committees, they are responsible for review and approve the company’s goals and objectives relevant to compensation. The Executive Committees for Wendy’s are David E. Schwab II (Chairperson), Nelson Peltz, Emil J. Brolick, and Peter W.

The largest component of pay is from performance based RSU grants, with the second being the base salary. The compensation committee determines the amounts and elements of compensation for the CEO, and the CEO determines the pay for all other executives with the approval of the compensation committee. The committee approves an employment contract for the CEO for the coming fiscal year that contains the annual base salary, cash bonuses, and RSU awards that are determined by the Board or the Committee. The compensation committee is comprised of independent directors and is in compliance with NASDAQ global select market listing standards.

2. To what degree does the compensation philosophy align with corporate strategy, culture and organizational resources?

Compensation is a critical aspect of every organization and appropriate consideration and strategic planning must be conducted in regards to compensation in order to ensure success of the organization’s mission statement. I believe that most managers fail to recognize the importance of compensation in the strategic planning process and write it off as something that they have little input or value added. They fail to consider that they have the responsibility to analyze compensation in the strategic planning process in order to select the appropriate compensation plan that will allow them to meet the organization’s mission with the least amount of resources possible. Any organization, whether it is corporate or government, has a responsibility to return value to its shareholders for their investment. In the private or corporate sector, the shareholders are the people that own stock in the company and in the government sector the shareholders are the taxpaying citizens who have entrusted the organization with acting responsibility with the resources that they have provided. Accordint to Milkovich, Newman, and Gerhart (2014), total compensation is a very dynamic aspect in the strategic planning process of any organization (p.43) and all too often I believe that executives, managers, and employees see it as a static aspect and fail to see how it can give their organization an advantage or edge over their competition. I am currently a middle manager in the United States

The structure of compensation is important because it can help to create an outline on how managers can effectively run companies and create value for shareholders. Pay packages and other benefits should give high-level executives incentives to run companies correctly and efficiently. It should also make executives think in the long

Individual Assignment 2:Report on the Composition and Operation of the Remuneration Committee and its Effects on Executive Remuneration