How does executive compensation differ from the compensation packages provided for other employees? Describe some of the incentives available for executives.
The following solution includes a sample response to the questions posed in this problem:
Executive compensation plans are usually given to CEO's, Presidents and senior Vice Presidents of organizations. Just as employees are rewarded for bringing profit to the business, executives are also compensated for a business meeting or exceeding prescribed goals. Some think that because of their high level of responsibility in the business, executives should be compensated on a larger scale than other employees. The amounts of compensation are sometimes astronomical - according to the textbook, the head of Citigroup was paid a $293 million bonus, and the head of AOL/Time Warner received $164 million!
Regular employees are not compensated unless their performance warrants it. Executives have received severance packages and bonuses in excess of $12 million even when their companies lost money.
Executive compensation is paid in a number of ways: executive salaries, executive bonus plans, long-term performance incentives, supplemental benefits, and perks.
Stock options have ...
This 683-word solution provides definitions of employee and executive compensation packages and includes detailed responses to questions about the differences between employee and executive compensation packages. The solution can be used to respond to discussion questions or as a guide to preparing a research paper on the topic.