Posts Tagged ‘ceo compensation’

Why Do So Many CEO Compensation and Employment Contracts Go So Wrong?

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Michael Graham examines the challenge of creating a responsible value exchange strategy to attract and retain the right CEO to head a business, while at the same time ensuring this is compatible with the over-all objectives and business strategy of the company.

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Filed under: PSX Articles



It is Absolutely All Relative

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There are important question shareholders, boards, the media, and the public should be asking when it comes to CEO pay, but it’s not necessarily “how much”.  In her April 6, 2013 article for the New York Times, If Shareholders Say ‘Enough Already,’ the Board May Listen Gretchen Morgenson writes, “Last year, the median chief executive at a United States company with more than $5 billion in revenue received about $14 million, 2.8 percent more than in 2011, according to an annual pay analysis conducted by Equilar. The 2012 increase, though relatively modest, still represents a raise for most of those who inhabit the corner office (and whose companies had filed the data by the end of March)…. Do this year’s figures show any evidence of progress toward a new pay paradigm? You know, where the gap between the compensation of executives and workers narrows, or where company directors put shareholders’ interests before those of the hired hands?” 
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Filed under: Expert Perspective - Rewards



It is the Customer who Pays the Wages (Henry Ford)

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As Henry Ford more than  alluded to in his quote (above), the only way a company can pay wages to its workers and management is to have customers (or advertisers) support their products and services. To take this one step further, it is a successful company who has the resources to pay its employees well. With all employees, and especially those most highly placed in the organization the “value exchange” that results in fair pay is very much a two way street.

Employee commitment, ethical behavior, and working hard at the right tasks all improve company success, and with increased profits companies can pay better wages. The most vivid example of this can be seen with the CEO, although unlike most other employees the CEOs pay is set down in a contractual form. 
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Filed under: Expert Perspective - Rewards



If we have said it once…

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Expert Perspective by Grahall’s OmniMedia Editorial Board

If we have said it once we have said it a thousand times: when allocating one of your most scarce resources (that would be cash for rewards) don’t target pay solely on how an individual performs, but on how important that job is to the success of the enterprise. The more important the position, the higher the possible (and actual) rewards should be.  Attracting and retaining top talent and high performing individuals to the most important jobs in your organization is critical to lasting success. Using this approach in your Total Rewards strategy may actually lower costs of attracting and retaining average individuals. Any incremental increase in compensation cost allocated to truly high performers in critical positions will be more than offset by the business results achieved through their greater output.
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Filed under: Expert Perspective - Rewards