BUS 434 Week 5 Discussion 1 Responses

Discussion 1 Executive Compensation

After reviewing the Coleman (2016) article on executive compensation and reading this week’s assigned readings, choose one of two statements below and construct an argument supporting your position:

a. The market trend towards escalating executive compensation reflects the critical importance of an executive to an organization’s long-term viability.

b. The growing compensation inequity between executive management and the average employee threatens to destabilize organizational morale and societal justice.

Guided Response: Respond to two of your classmates’ posts.

I need someone to reply to these two post

Reply to Christy Moulton

1. The market trend towards escalating executive compensation reflects the critical importance of an executive to an organization’s long-term viability.

Executives are important to an organizations overall success. Executives are responsible for many different areas within the organization and are required to have a vast variety of skills to maintain the organization. Executives are crucial for the overall success and the long-term viability of the organization. Yes, executivestypically make a lot of money and receive many benefits because of their positions. The opposite side of thedebate is that the executives are leading companies that can employ thousands of workers, generate billions ofdollars in revenue, operate in numerous markets both domestically and internationally, and produce hundreds,even thousands, of products. They have enormous responsibility that requires much experience, expertise,judgment, and time. Therefore, executives need to be adequately compensated for all of that (Weathington & Weathington, 2016).

As a general rule, base salary accounts for just 20 percent of a CEO’s pay. The other 80 percent comes from performance-based pay. Long-term incentive payments for meeting performance objectives to be achieved for a two- to five-year period. These awards are sometimes described as performance shares, performance units, or long-term cash incentives (Coleman, 2016). If the executive does not meet the performance standards, then they face not receiving these performance bonuses that make up a big part of their salary.

Coleman, B. (n.d.). Executive compensation (Links to an external site.)Links to an external site. (Links to an external site.)Links to an external site.. Retrieved from http://www.salary.com/executive-compensation-it-starts-with-the-ceo/ (Links to an external site.)Links to an external site. (Links to an external site.)Links to an external site.

Weathington, B. L. & Weathington, J. G. (2016). Compensation and benefits: Aligning rewards with strategy. Bridgepoint Education, Inc.

Reply to Katise Aiken

I am ok with market trend towards escalating executive compensation reflects the critical importance of an executive to an organization’s long-term viability. To find qualified and talented employees, a good compensation package needs to be set in place. That also goes for finding a qualified CEO. “The recruiters will assure the board that finding the right CEO is challenging, and they must “pay up” to obtain the “right talent” (Hartung, 2015, para. 14). A CEO is responsible for making executive decisions, overseeing that the company is performing at the top level, and making sure the overall success of an organization. I agree that a CEO should be well compensated for their knowledge, experience, and skills. “Executive compensation needs to be designed in a comprehensive manner that supports the company’s overall business strategy” (Weathington & Weathington, 2016, ch. 9.3). A CEO must not forget about the rest of the company. A regular employee can’t make the same amount of money as a CEO; however, everyone should be well compensated, also. Another way a CEO earns a compensation is through incentives. For example, the CEO at my company gets a pretty hefty bonus for annual performance. In addition, they get a car allowance, cell phone reimbursement, and maybe clothing allowance. According to Coleman, “if you know how well the CEO is compensated, you can get a sense for how generous the company is likely to be toward other employees as well” (para. 5). That would be a good thing if companies think like that, but most of the time that’s not the case. Let’s not forget about the employees that work hard to make a company profitable and successful.

Coleman, B. (n.d.). Executive compensation. Retrieved from http://www.salary.com/executive-compensation-it-starts-with-the-ceo/ (Links to an external site.)Links to an external site.

Hartung, A. (2015). Forbes. Why CEOs Make So Much Money. Retrieved from https://www.forbes.com/sites/adamhartung/2015/06/22/why-ceos-make-so-much-money/#6d40bba04203 (Links to an external site.)Links to an external site.

Weathington, B. L. & Weathington, J. G. (2016). Compensation and benefits: Aligning rewards with strategy[Electronic version]. Retrieved from https://ashford.content.edu (Links to an external site.)Links to an external site.