Many times, short-term incentives are formula driven and tied to company performance such as revenue growth or profit growth. Short-term incentives are just the beginning of the compensation debate. For many companies, the question of what the CEO’s package should be quickly arises. Is 10% fair? How about 1%? What if the company is a multi-billion dollar organization? Does that change what is fair? What if the company only brings in $250 million in annual revenues, but they have revenue growth of $50 million per year? How should the CEO be rewarded given these scenarios?
Compensation consultants argue that in today’s environment where institutional shareholders, regulatory acts, and corporate governance scrutiny have lead to CEO turnover due to non-performance and moral lapses, compensation needs to be high to attract and retain the best talent... displayed 300 characters
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Is 10% fair? How about 1%? What if the company is a multi-billion dollar organization? Does that change what is fair? What if the company only brings in $250 million in annual revenues, but they have revenue growth of $50 million per year? How should the CEO be rewarded given these scenarios?
Compensation consultants argue that in today’s environment where institutional shareholders, regulatory acts, and corporate governance scrutiny have lead to CEO turnover due to non-performance and moral lapses, compensation needs to be high to attract and retain the best talent... displayed 300 characters
