Executive Compensation and Employee Benefits Term Paper

Executive Compensation and Employee Benefits - Term Paper ExampleA company with a be of products, clear vision and unique ideas stands to lure the most competent candidates in each and every take but to maintain this momentum of better performance, it is dictatorial that the top executive director level secures the best talent. A payment package which is attractive to ensure these talents atomic number 18 maintained at the top management level of the company since they enjoy significant negotiating power and as such additional incentives up and above the compensation package can be impacting in luring an executive to join an organization. Challenging and unique opportunities do sway employees and thus in addition to an appealing compensation package, employee benefits have been applied so as to supplement it. Employee benefits has been very helpful in enhancing economic security of the employees thus curtailing labor turnover, increasing employees loyalty and improving product ivity.Compensation is any kind of remuneration that is get by a person in return for his/her performance of the companys or organizational tasks. There are four common methods of compensation performance related to pay (PRP) such as commission, bonus, time rate and piece rate fixed primary pay non-economic benefits such as house, car etc and finally willpower benefits where employees are awarded shares (Reid, 2004). Several factors influence the wage and the salary structure, these admit pressure from trade union, lowest wage rates, existing market rates, supply and demand for a particular job, the employees qualification and the ability of the organization to pay. Compensation in the form of wages is normally given to a worker while compensation in the form of a salary is normally given to an employee. Executive compensation refers to the way senior executives for the business corporations or firms are paid. Executive compensation comprises of the basic salary, options, shares , bonuses plus additional company benefits (Bagley & Savage, 2006). Forms of Executive compensationThere are a number of types of executive compensation which offers numerous performance incentives and tax benefits. They includeStock options -Refers to the privilege sold by a buyer to a seller that gives the latter a right rather than an obligation either to call(buy) or put(sell) the business line at an agreed price on a particular date or within a specified period (Bagley & Savage, 2006). Stock options ensures the CEOs interests are kept at par with that of shareholders since their value is subject to the price of the stock remaining above the strike price/exercise price (price upon which a stock will be sold or bought upon the exercise of the option) of the option. However stock options are open to abuse through options backdating and excessive risk seeking (Lawrence, 2002). restricted stock - These are stocks awarded to an executive but can only be sold once a specific conditio ns are arrived at and it carries a same value to the stocks market price during time of the grant.Deferred compensation -This is normally applied for taxation purposes and involves postponing compensation up to a certain future date. Executive perks compensation includes travel reimbursements, private jet and extra rewards given to the executives. Retirement packages awarded to executives following their retirement from the organization this is open to abuse as corrupt executives can annex golden