Executive Compensation Strategy
Executive Compensation Challenges
Executives have a unique role and they have different expectations of compensation:
- Decisions made by executives have a great impact on the organization's short-and-long-term results, so their performance requirements are more demanding that those of other employees.
- They may have, or be seeking, an ownership position in the organization
- Since they are highly paid, taxation presents particular problems
- Their highly paid status also creates problems for them relative to employee group benefit plans, since legislation continues to place limitation upon executive-level benefits.
- They frequently play an important social role for the organization and must be seen as leaders in the community.
- Attracting, retaining and motivating qualified executives in a manner that is acceptable to owners or shareholders.
- Ensuring that executive compensation is at risk for acceptable performance.
- Taking maximum advantage of accounting, taxation and other rules while maintaining focus on the basic intent of compensation.
- Determining the impact of executive compensation on other compensation programs.