Many organizations, especially large ones, administer executive compensation somewhat differently than compensation for lower-level employees. An executive typically is someone in the top two levels of an organization, such as Chief Executive Officer (CEO), President, or Senior Vice-President. The common components of executive compensation are salaries, annual bonuses, long-term incentives, supplemental benefits, and perquisites.
Two objectives influence executive compensation:
(1) Ensuring that the total compensation packages for executives are competitive with the compensation packages in other firms that might employ them.
(2) Tying the overall performance of the organization over a period of time to the compensation that is paid to executives.
It is the second objective that critics of executive compensation believe is not being met. In many organizations, it appears that the levels of executive compensation may be unreasonable and not linked closely to organizational performance.
Elements of Executive Compensation
At the heart of most executive compensation plans is the idea that executives should be rewarded if the organization grows in profitability and value over a period of years. Because many executives are in high tax brackets, their compensation often is provided in ways that offer significant tax savings.
• Perquisites
• Supplemental Benefits
• Long-Term incentives
• Annual bonuses
• Executive salaries
By Priti Shah
Laurent & Benon Management Consultants Ltd, a public limited company with its corporate office Gurgaon with Pan-India presence. We as an organization strive to offer the right Human Resource Solutions at the right time and enable our clients to enhance the net worth of their human resource capital.
Two objectives influence executive compensation:
(1) Ensuring that the total compensation packages for executives are competitive with the compensation packages in other firms that might employ them.
(2) Tying the overall performance of the organization over a period of time to the compensation that is paid to executives.
It is the second objective that critics of executive compensation believe is not being met. In many organizations, it appears that the levels of executive compensation may be unreasonable and not linked closely to organizational performance.
Elements of Executive Compensation
At the heart of most executive compensation plans is the idea that executives should be rewarded if the organization grows in profitability and value over a period of years. Because many executives are in high tax brackets, their compensation often is provided in ways that offer significant tax savings.
• Perquisites
• Supplemental Benefits
• Long-Term incentives
• Annual bonuses
• Executive salaries
By Priti Shah
Laurent & Benon Management Consultants Ltd, a public limited company with its corporate office Gurgaon with Pan-India presence. We as an organization strive to offer the right Human Resource Solutions at the right time and enable our clients to enhance the net worth of their human resource capital.
