Card Set Information
What industries have the highest-paid CEOs?
What industries have the lowest-paid CEOs?
What is Compensation?
Represents the rewards employees receive for performing their job.
What is Intrinsic Compensation?
What is Extrinsic Compensation?
What are the Elements of Core Compensation?
The main things used for compensation.
Base Pay Adjustments
What are examples of Base Pay?
What are examples of Base Pay Adjustments?
What is Fringe Compensation?
: Legally-required benefits, Discretionary benefits
Legally Required Benefits are based on what?
What are examples of Legally Required Benefits?
Promote worker safety and health
Maintain family income
Assist families in crisis
Provide assistance in case of Disability or Unemployment
What are examples of Discretionary Benefits?
What are characteristics of Key Employees?
An officer making at least $160,000 in 2009
A 5% owner
A 1% owner making at least $160,000
What are characteristics of a Highly Compensated Employee?
A 5% owner at any time during the year or the preceding year
What are examples of Executive Compensation?
Current or annual core compensation
Deferred core compensation
: stock compensation
Deferred core compensation
: golden parachutes
Enhanced protection program
Benefits and prerequisites
What are Golden Parachutes?
Provide executives pay & benefits following termination to due to ownership changes
Income and benefits for 1-5 years
Not triggered by retirement, resignation or disability
Treated as a business expense
What are examples of Enhanced Benefits?
Supplemental life insurance
What are Common Perquisites?
Tickets to sporting events
Who are Key Players in a company?
Board of directors
What are the duties of Compensation Consultants?
Develop packages based on strategic analysis. Ex
: External market context, Internal factors
Possible conflicts of interest
What are the duties of Board of Directors?
Represent shareholders' interests
Usually 15 members including CEOs, executives, community leaders, and professionals
Give final approval to recommendations
Are compensated well for services
What is a Compensation Committee and what is its duties?
Usually other boar of directors' members
Review consultants' recommendations
Discuss assets and liabilities
Make final recommendations
What are examples of Executive Compensation Theories?
Agency theory - Shareholders give control to executive, but interests my conflict
Tournament theory - Compensation pay based on productivity vs who they are
Social comparison theory - Compensation compared to others
Regarding International Competitiveness, what is the SEC rule?
SEC rules require the disclosure of executive compensation in the U.S. companies