Making A Good Compensation Plan - 1288 Words

Introduction: Making a good compensation plan will motivate the managers. Bad compensation plan could influence the company’s development and damage the shareholders’ value (GordonKaswin, 2010,p2). The XXX Ltd want to design a compensation plan which can attract and retain the executives needed to achieve and its objective of establishing an industry-leading company with high operational performance and maintain shareholders’ value. The issues addressed in this compensation plan is how to protect shareholders’ value via the compensation contract and compensation plan components: Base salary, cash compensation benefit,. Nevertheless, in order to determine the different portion of the each component, basic salary survey and performance associated with target accomplishment should be guided the payment model selection. Conclusion: XXX LTD establishes a Remuneration Committee, Setting up a specific executive compensation plan for senior managers are necessary. The interest conflict between shareholders and managers arise by using last inappropriate compensation plan. The original executive compensation plan can not incentive managers, and attract managers to achieve the company goals The original executive compensation plan does not satisfy shareholders, and shareholders’ value does not protect under that compensation plan. Discussion: Theoretical basis for the executive compensation plan: Agency theory underlines the relationship between shareholders and managers, ownersShow MoreRelatedEthical And Legal Environment Of Organizations1031 Words   |  5 PagesExecutive Compensation Cristy Lawler Bethel University Dr. Dorothy Black MOD 450: Ethical Legal Environment of Organizations January 9, 2017 â€Æ' Abstract For years CEO’s have been making larger salaries in compression to the employees that work for the company. How the salaries are decided can be one of two ways. Either by how much money the company brings and gives to the shareholders or by how well the CEO runs the company. The question becomes which was is not only morally but also ethicallyRead MoreReport on in a World of Pay944 Words   |  4 Pagesengineered a huge uptick in sales for a company that has been making incursions into Typwares markets, is ready to jump ship--provided Typware makes her a good offer. Jurgen Mehr, is irritated about the salary demands of the American executive he wants to hire. She would be a brilliant catch. But the salary she wants is nearly as much as Mehrs. Renate Schmidt is now in trouble with this matter. She is in dilemma to take decision of making compensation package for Anne Prevost. Since 1996, Typware hasRead MoreCaso Scott and Sons Company884 Words   |  4 Pagescompany is facing a good economy as evidenced by the increase in sales. Industry is investing in research and development of products. Competitors are slowly entering the market. O.M. 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The study found out that the company offers compensation and benefits plans such as base pay, variable pay, insurance (health, risk, and life), holiday pay, maternity leave, vacation, and pension. This study also determined the advantages and disa dvantages of the above compensation plans and benefitsRead MoreEssay Total Rewards1510 Words   |  7 Pagesinnovations in employee benefits can improve the overall competitive compensation strategy of the organization. NEW AND IMPROVED REWARDS AT WORK 3 Determine how innovations in employee benefits can improve the overall competitive compensation strategy of the organization. Innovations in employee benefits can improve the overall competitive compensation strategy because of what may be offered to employees through eachRead MoreWhat A Pay For Performance Compensation Policy1347 Words   |  6 PagesIntroduction All organizations must remunerate their employees for their time, effort, and contributions to that organization. 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