Page 65 - Appreciating Organization's Biggest Assets

high. • Pre joining holiday for family and
• The executive compensation is friends of CEO.
not disclosed to others. Secrecy is • A retention bonus.
maintained. • Minimum hike of 25% from the
• Scarcity of talent determines the recent pay
actual compensation. • A house with all the modern
• Executives cannot form unions. amenities like car, yacht, private

Growth in remuneration of planes, parking space, driver, in-
executives: terest free loans, company credit
card etc.
Company size: The larger
the company, more are the • Travel, insurance, medical,
responsibilities. For example, CEO’s recreational benefits.
in USA are paid based on market • Counsellor/legal advisor/
cap of the company. accountants to assist in legal, tax and

Remuneration structural change: financial problems.
Changes in the composition of • Employee stock option plan.
salary are done to solve the agency • Linking pay and benefits to
problem. There are efforts put in to individual performance or allowing
link pay to company performance. executives to structure their long

Pay Transparency: After SEBI’s term compensation. Companies
decision on organizations to disclose like PepsiCo do this.
the executive’s salary in the balance Factors Affecting Executive
sheet, there have been a competition Compensation:
between rival firms to push the
median upwards for attracting and Complexity of the Job: Executive’s
retaining the top talent. job is much more complex in nature
than any other organizational jobs.
Competition of talent: There is a The bigger the size of organization
need to pay above average salary to and its product or service line,
top talents and discourage them to the more is the complexity in the
not join competitors. executive’s job. Hence, higher is the

Components of Executive compensation paid to the executives.
Compensation: Competency required by top
• Sign on bonus to woo talent from executives: Traditional organizations
the rivals and ensure commitment. like manufacturing which were

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