Question

Executive compensation has received significant media attention over the past several years. What do you think is the most effective way to compensate top leadership in an organization? Leverage your book and outside resources to present your proposal.

Answer 1

answer-

Executive compensation is very controversial topic because disparity we see in compensation between executives and other average employees in an organization. For example- CEOs of companies are paid in millions of dollars with other benefits like bonuses, exclusive rights etc while average employees are paid in thousands or hundreds of dollars range. this situation has create opinions of people that some say executives should be paid high because they are top leaders and lead the whole company while some say in opposite that over compensation is bad for company and employees as well.

the most effective way to compensate top leadership LIke CEO in an organization are-

Set metrics for compensation for top leadership-

In this method, i would say, the compensation should be determined by leadership's position, Experience, skills, achievements and Demand in market.If CEO of an organization set high standard on these metrics then he is eligible for getting good compensation because he is able to achieve organization's mission and vision for which he should be paid.

for example- Sundar Pichai paid in hundreds of miliion or US$1,881,066 (2018) because he is experienced and employee of Google for more than 10 years. he has knowledge and experience of work at Google. He educational qualification and skills to lead the whole organization.

also using benchmarks in this will help company to set compensation in which company will compare the demand of a particular leader and how desperately they want to recruit in the organization.the more demanding leader attract more high compensation because of above metrices.