CEO compensation
Recent
past has witnessed significant establishment of various organization across the
globe. The establishment of these organizations has continued to be beneficial
for the economy because they help in enhancing economic development through the
contributions into national product and gross domestic product. With the
establishment of various organizations, majority of the citizens have gained
significant aspects of employment thereby leading to the reduction in
unemployment rates. The aspect of employment generation is critical and the
establishment of wages requires the consideration of constitutional attributes
because there are provisions concerned with deliberation of wages (Ira Kay, 2007). With regard to employee
compensations, alarm has been raised in the economy of the united sates
concerning the aspect of executive pay. Generally, executive pay reefers to the
financial compensation accorded to the officers in an organization. The attributes
of executive pay comprises of benefits, wages, salary, tax laws and performance
rewards amongst others. Over the period, the attributes of executive has
significantly risen relative to that of the average workers’ wages in the
United States. Given that the attributes of executive pay are the aspects of
the corporate governance, significant measures have been authenticated to
ascertain the authenticity of the increments of CEO Compensation. Analysis of
this subject has revealed that the topic is contentious because significant
group of researchers believe that the rise in executive pay is justified while
another significant aspect believes that the increases in the executive
benefits is unethical. In this regard, the aspect of employee pay in the leading
organization across the globe has continued to be a daunting task for the
managers and corporate decision makers. Event though, executive employee
benefits is an attribute that is determined by the board of directors of any
company.
Over
the period, corporate organizations in the United States has been significantly
criticized from the global regime because of the execution of dysfunctional
payment reward. The disparities and
complexities associated with this provision is the attribute that has resulted
in the creation of wide gap between the executive chief executive officers and
the average workers in the society. Over the period, concerns have been raised
about the attributes of executive compensations because this consideration has
resulted in the establishment of critical attributes towards development of the
market (Jennifer Carpenter, 1998).
Analysis of the provisions has sated that the consideration of rewarding
executive employees handsomely is extremely detrimental for the performance of
the firm and this attributes has been used by specific number of employees to
employ their personal attributes in the company. Analysis of the records has
highlighted that the establishment of this reward system is detrimental because
it encourages the conduction of unethical practices that derails the
performance of the organizations. In the wake of these disparities about the
executive pay, standard justification has been developed to explain the
necessity of rewarding the executive emlployees with significant amount of
money. One of the critical reasons highlighted by the market includes the
considerations of the activities of market forces. The attributes of market
forces of demand and supply are responsible for the establishment of
equilibrium and this new equilibrium is noted as the executive pay of the
organization. With regard to the f
Sources
of demand and supply, the establishment of these policies are critical in
enhancing the observations in the market and sometimes leading to the retention
of Hugh performing chief executive because failure to offer high salary and
remuneration for the chief executives results in the aspect of transfer to
other significant markets in the same industry.
In this consideration, the attributes of employee pay in the United
States, the organizations have continued to experience significant disparities
and complexities in the conduction of corporation trade and envelopment (Lucian Arye Bebchuk, 2006). Over the period,
significant concerns have been raised about the issues surrounding CEO
Compensation and majority of the researchers have agreed that CEO Compensation
should be based on the contributions of the organizational factors.
The
aspect of establishing executive employee compensation should be based on the
amount of efficiency in the industry and on the measures employed by the chief
executives offices. In reality, the payment of high amount of benefits to the
chief executives officers may be detrimental to the organizations operating in
significant losses because this leads to the increase in organizational losses.
The depiction of CEO Compensation from the analysis of the data collected from
the markets shows that the aspect of determining employee compensation is
significantly flawed because there are no indicators highlighting the
incentives of the constitution and the depiction employee compensation (Michael L. Davis, 2006). On the other hand,
the stake holders and corporate directors believe that they have the role of
enhancing the performance of the organization through the aspect of ensuring
that the chief executive officer is adequately compensated by the company. In
this regard, the compensation of some organizations is based on the efficiency
and performance f the organization. The members of the board also have the
attribute of influencing the percentage of contribution of CEO Compensation
because they want the chief executive officer to have positive image about the
organization and this attribute propels them to increase the earnings of chief
executive earnings.
Performance
reward
The
aspect of performance reward has emerged as the ideal tool used by majority of
organization is ascertaining the contributions of the CEOs and providing
rewards accordingly. Analysis of the market has revealed that majority of the executives
are rewarded with bonuses and pay rise even when the companies are faltering (Randall S. Thomas, 1994). The aspect of
company stock can be used to ascertain the performance of the executive
officers and this is done by comparing the year to year to ascertain increase
of decrease in the performance of the organization and this aspect will enhance
the determination of the payments and bonuses awarded to the chief executive
officers.
According
to the graph above, the performance of the CEO can attained through the
analysis of the performance of stock in the market. The results of this
analysis are extremely beneficial to the operations in the market because they
results of this analysis are used in the determination of CEO payment. In the
wake of these realities, Microsoft Corporation has emerged as one significant
company in the global perspective because its CEO Mr. Bill Gates has
successfully applied the provisions of pay performance to derive his amount of
earning. In this regard, the adoption of this tool has enabled the
determination of CEO earnings based on the performance of the company.
Therefore, high performance of the company will result in increased earnings of
the CEO and vice verse (Ira Kay, 2007). The
concern raised by the organization of the economists about the aspect of high
executive remuneration is valid because the American corporations have
significantly enhanced increase in the rates of executive pay. Analysis of the
rerecords has shown the increase in the executives pay is unjustified because
there are no provisions highlighting the considerations of determining
executives’ salaries and remunerations. In this regard, specific numbers of
executive managers have been engaged with conduction of unethical behavior that
involves fixing of their own salary because they control significant amount of
shares in the organization. The consideration of organizational management
should the consideration of enhancing measures to help management the
organization and this can be done through the establishment of ideal strategy
for ascertaining efficiency and out put of the firms. In the depiction of
market development, the establishment of efficiency and market performance
should be established as the ideal methods of ensuring that executive employees
are rewarded based on their contribution to the market. In this regard, the
markets and the organizations in the united sates should consider introducing
the aspect of organizational production assessment because this helps the
economic planners to ascertain the contributions of individual firms in the
economy. Most importantly, the ideal measure of rewarding the chief executives
officers should be based on the consideration of efficiency. Efficiency
establishment is beneficial because it enhance the aspect of competition
between corporate executive officers of firms in the same industry (Jennifer Carpenter, 1998). The attributes of
competition will enhance development between the companies in the same industry
and this attribute will further increase the activities of the chief executive
officers. Finally, chief executive
officers have the role of ensuring that the goals and objectives if the company
are realized and this leads to the establishment of satisfaction between the
consumers, the stakeholder and employees.
The
attribute of using pay per performance is an aspect that is extremely crucial
and has resulted in the establishment of ideal revenue sharing between the
members of the organization. Over the period, various organizations have
continued to experience disparities with regard to rising CEO salaries because
the market has not devised ideal strategy for the organizations to observe
during the conduction of their duties. In this consideration, the aspect of pay
per performance is an extremely important that can be transferred and borrowed
by other significant market players. The rationale for this point is provided
by the belief that efficiency in the organizations can be achieved by employing
the usage of correct attributes. One of the correct attributes that should be
employed in these organizations is the consideration of employing ideal
measures that are ethical in the management of the organization (Lucian Arye Bebchuk, 2006). The consideration
of this attribute will significantly enhance establishment of ideal environment
where the operations of the market can be ascertained. Pay per performance is
an incentive that will significantly enhance revenue generation and it will
also enable organizations to increase their attribute of efficiency.
Technology
The
aspect of technological development has resulted in the establishment of ideal
developmental projects that have been initiated through innovation or through
the adopting of existing programs. The consideration of technological aspects
has proven to be extremely beneficial in the establishment of employee
remuneration. The consideration of employee remuneration requires
considerations of technological aspects that are critical in the establishment
of the salary scales. The introduction of technological advancement has enabled
the development of ideal machines that have significantly enhanced the establishment
of equity in the allocation of remunerations to the employees (Randall S. Thomas, 1994). In reality, the
chief executive officer is an employee of the organization and determination of
the proceeds and benefits are calculated using technological advents because
the usage of technological aspects. Analysis of the usage of pay per
performance uses the attributes of technology because it considers efficient
allocation of resources to the competing factors. In this consideration,
technology has been immensely beneficial in enhancing development of the
organization. Furthermore, technological advancement has resulted in the
establishment of organizational performance because it has enhanced the
attributes of development and this consideration has proven beneficial for the
enhancement of development. Furthermore, the consideration of technologies
advancement has resulted in the establishment of advanced technological
attributes for comparing the earnings of various chief executive officers.
Over
the period, analysis conducted has revealed that the operations of the
organizations are faced with significant disparities and complexities because
of the adverse effects of growing gap between average consumers and the chief
executive officers (Ira Kay, 2007). With
the realization of this fact, significant numbers of traditions and laws have
emerged to with the aim of establishing organizational development.
Technological development is an important aspect that has significantly
contributed towards the development of organizational development and towards
the harmonization of the CEOs salaries. The advancement in technology has been
of immense significance because it has enabled easier comparison of the salary
scale of the organizations in the United States. The development of
technological advancement has been used by the managers as a critical tool for
highlighting the existing disparities in the organization. Upon establishment
of the disparities, an ideal consideration has been devised to offered
solutions to the rising problems. The establishment of technology in the aspect
of CEOs compensation has resulted in the establishment of executive compensation
laws. CEOs compensation has continued to a daunting task to the economy of the
united sates because majority of the CEOs have devised critical methods of
generating money from the organizations (Michael
L. Davis, 2006). In this regard, the stakeholders have continued to
experience significant disparities because the activities of the chief
executive officers have derailed the profitability in the organization.
The
establishment of executive compensation laws
Executive
compensation is an extremely crucial aspect that has been the subject of forums
in the United States because of the rising disparities attributed to the rising
salaries of the CEOs. The provisions of executive compensation discussion and
analysis section of the company has visions and values depicting the attributes
of technological advancement and its contributions towards the initiation of
chief executive compensations. The results from these analysis has provided
that the issues of executive compensation laws. Because of the disparities in
the establishment of chief executive compensation, various set of rules have
been devised to enhance establishment of harmonization of the benefit scheme
because this will significantly help the business organizations in developing
ideal objectives to help in enhancing development (Jennifer Carpenter, 1998). The establishment of changes is a
strategy adopted by the invention of technological attributes. Analyses of
significant number of factors and attributes have suggested the aspect of
executive compensation is the consideration of establishment of the issues
attributing to executive development. The developments of these factors have
continued to be the role and attributes of the board of directors. However,
analysis of the survey conducted on the operations of the board members has
suggested that the board members of the leading corporations and organizations
are less concerned about the aspects of rising compensation levels.
Finally,
the establishment of executive compensation has continued to be significantly
important in the establishment of the economies. The provisions of the policies
in CEOs comensation have continued to rise at an increasing rate and this
attribute has significantly affected the establishment organizations. The
concern for the establishment of the organization has been nictitated by the
quest for the governments to enhance distribution of goods and services and the
consideration of organizational failure. The consideration of the increasing
CEOs compensation is likely to increase in the future. The reason for the
increase of the feature is depicted through the analysis of the market
operations. Over the period, the aspect of rising senior employee’s
compensation has continued to be experienced across the global regime but
significant issues have been witnessed from the cases in United States and
these cases are likely to continue because the states has not initiated ideal
measures that will help in curbing the establishment of rising executive
compensation. On the same note, the organizations in Europe have established
the enactment of ideal measures that will help in the reduction in executive
compensation. In this regard, the European markets have employed regulatory
aspects and the situations in the economy in Europe will change thereby leading
to the reduction in the aspect of executive compensation (Ira Kay, 2007). Despite the establishment of campaigns in Europe
to help reduce the rising executive compensation, it is not clear if the
measures employed will enhance development and result in the reduction of
executive compensation.
References
Firm diversification and CEO
compensation:managerial ability or executive
entrenchment?1994New
YorkGraduate School of Business, Stanford University
Myths and Realities of Executive Pay2007United
StatesCambridge University Press
The Professional's Guide To Current
Issues2006Executive Compensation: 73
The Unfulfilled Promise of Executive
Compensation2006Pay Without Performance: 104
Theory and Evidence1998Executive
Compensation and Shareholder Value: 512
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