Question

Use the Internet to research common components of executive compensation plans. Next, examine these components and identify one (1) component that you deem essential to motivate executives to lead companies toward competitive advantage. Provide support as to why you chose that component.

Popular press and media accounts generally suggest that executives are overpaid. Discuss two (2) principles underlying the argument in favor of high executive compensations and determine whether these principles are sound. Provide examples to support your response.

Answer 1

Compensation plans for executives generally include incentives and travel charges . They are paid as per their business and this is a very good move which also helps in encouraging them. When they are paid for the business they bring and given incentives for every percentage of sales done by them ,they will be motivated to bring more business and earn more which is also beneficial to the company. Hnece this component of paying as per their sales is very good step. The principles behind hig payments of executives is that they are the reason for the business of the company and they work very hard to get customers by going to them and convincing them. Their compensation is based on their efforts for the company and it is not worng to pay them more whic is correct. For example a bank gets a deposit of huge amount from a customer and this is done by some executive who went to the customer , explained the advantages of the bank, filling in the application and getting business. Giving the executive a small amount as appreciation is not wrong and it does not come under overpay.