I need help analyzing the weak links between Executive Performance and Executive Compensation.
For example, the growth of the average CEO pay over the period 1990 to 2005, as the head of a typical public company, was about $9.7 million dollars.
Are there many weak links between CEO pay vs. CEO performance?
It has to be 1000/more words with two/more sources!
The weak links between executive performance and executive compensation are readily apparent to most members of the general public, due to the fact that they have noticed that during the downturn in the economy and financial troubles that some companies have found themselves in, the executives of those companies have continued to maintain or even increase their level of compensation. This is obviously a demonstration of an inverse relationship between the companies performance or more accurately the CEOs performance, and the level of compensation that that individual receives. One of the primary reasons that there is a weekly between executive performance and executive compensation, is due to the subtle details that are involved in the manner which executives are paid by organizations. These details are worked out during the negotiations process for the executives compensation, and one of the primary details that helps to keep executive compensation above the level of performance of the organization is the level of the base pay that the CEO negotiates to receive on a continuous basis, which is apparently independent of the organization's performance. For example, a CEO may negotiate with the board of directors of an organization for a guaranteed salary of $1.2 million per year for a minimum of three years, as well as for stock incentives and other perks that are based upon the company's profitability over that time span. If the company performs well under the CEO's leadership and direction than ...