Abstract This paper explains the executive compensation policy of Rite Aid Corporation, a publicly traded company. The author contrasts the company's executive compensation policy with that of its chief competitor. The paper suggest several ways to enhance a company's policy to minimize agency conflict and maximize shareholder wealth.
From the Paper "Rite Aid Corporation is a drug store chain. The stated objectives of its Compensation Committee are to support the achievement of desired company performance, to provide compensation and benefits that will attract and retain superior talent and reward performance and to fix a portion of executive compensation to the outcome of the Company's performance. The executive compensation program includes a base salary performance bonuses and long-term incentives in the form of stock options. Stock Appreciation Rights known as SARs stock-based awards and restricted stock awards ..."
Tags: executive compensation programs, Longs Drug Stores, Rite Aid Corporation, bonus, salary, short term incentives, long term incentives, compensation committee, variable compensation
Abstract This paper details the history of compensating employees for work, including various approaches used today. The author details sales compensation as compared to different methods of paying employees. The writer states that different methods of compensation depend on the actual work being performed. The paper concludes by citing the important connection between employee compensation and employee motivation.
From the Paper "Although archaelogists do not know the first time that humans worked for compensation, the first salaried work necessitated an advanced society that had some type of barter system in place that allowed work to be exchanged for goods and services. In addition, the society needed to have organized employers that agreed on how much should be given for how much work. From this, most infer that the first salary would have been paid in a village or city during the Neolithic Revolution, sometime between 10,000 BC and 1,000 BC (Wikipedia)."
Abstract The paper discusses how free enterprise affects the overall business environment and specifically as it determines, or should determine, compensation strategies of organizations. Free enterprise is first examined as it relates to North America and to companies and corporations. This is followed by an in-depth analysis of organizational compensations strategies within the framework of free enterprise. The paper's conclusion is that executive level compensation strategies have been separated from free enterprise fundamentals and that this has led to corporate abuses of power.
From the Paper "This paper examines the role that the general economic theory, as contained in the concept of free enterprise (FE), plays in contemporary organizational compensation strategies. The question posed here asks if the concept of free enterprise has been completely discarded in organizational compensation strategies as managed through human resource departments and corporate strategy making bodies. The hypothesis is that while most employees are compensated based on what the FE market will support, most executive level compensation strategies are no longer dependent on the FE to determine appropriate levels."
Abstract This paper critically analysis some of the issues and concerns of the compensation and the benefit models used in the IT industry. Many similarities as well as differences are observed based on the job scope, the nature of the core business and the location of the business. The effort of this study is to ensure that the best possible model is introduced.
Table of Contents
Introduction
Discussion
The Pay Model
Strategic Perspectives
Internal Alignment
Job Analysis and Evaluation
Person-Based Structures
Competitiveness and Pay
Pay for Performance and Performance Appraisals
Benefits Determination and Benefit Options
Extending the Compensation System - Special Groups
Managing the System - Government & Legal Issues
Conclusion
From the Paper "IT encompasses design, installation and maintenance of computer hardware, software, and a forum for collection, processing, storage, presentation, archiving and retrieval of information. The concepts of processing information collected using all the capabilities of a computer (hardware, software, databases and storage technology) and the networks linking the components of computers together to share information as and when needed is referred to as Information Technology. It is clear therefore, that IT industry employs individuals within a wide range of job scopes. As a consequence, the motivating factors that are required differ considerably. Compensation and benefits are an important factor in the motivational theory models used in organization."
Abstract This paper examines the major benefit and compensation plans in the United States. It includes a discussion of health care, stock options, and other benefits. It discusses compensation including hourly wages, salaries and commissions.
From the Paper "A comprehensive benefit program for employees of a company would include all of the following elements: A choice of health care options for employees and their family members. This would include access to one or more Health Maintenance or Preferred Provider Organization programs; An option under which an employee that opted out of the company's health care program would be given a monthly cash incentive instead; A dental care program for the employee and family members..."
Abstract This paper looks at stock options and compensation packages and some of the problems raised as well as comments from those supporting this approach, noting the recent rule changes that will also change how employees are compensated with stock options, an addition to base pay and only one of the other means of pay that are used to motivate, recruit and reward.
From the Paper "Compensation packages are a means by which companies can achieve several different goals related to recruitment, retention, and motivation, among other things. Such packages are constituted in a variety of different ways, and one issue that has been raised is what role stock options should have and how effective they are in the compensation package. The question is also asked as to whether they serve the needs of the company and the employee alike or favor one over the other. In terms of the general issue, of compensation, Molvig (2005) states, Executive compensation never involves just one element. Boards must look at every piece of the package to determine if it furthers the goals of the CU and the executive (para. 1). Compensation is not the only element in recruitment and retention, however, and surveys show that while important, compensation is not necessarily the most important factor. "
Abstract The paper evaluates the ethics, compensation programs and benefits spending for company associates at Wal-Mart. The evaluation relies both on historical salary data, gender differences in pay, and on on the utilitarian concepts of ethics, and the interpretation of utilitarian ethics, as presented by various researchers.
Outline:
Introduction
Assessing the Ethics of Wal-Mart's Wage Structure
Utilitarian Ethics of Wal-mart's Compensation Program
Conclusion
From the Paper "From the ethical and theoretical constructs as originally defend by Mill as utilitarianism (Mill 1861), their extensive use in the development of ethics-based programs for managing both governmental and corporate institutions, and the application of concepts to contemporary management (Adams, 1976), a solid theoretical framework has been created for evaluating if the salary, compensation and benefits practices of Wal-Mart. The mass merchandisers' practices in regard to hiring, retention and bonus payments to employees is ethically argued to be contributing to the company's greater financial performance and ability to invest heavily in its fulfillment systems, in addition to its retail stores.
Deliberately underpaying associates and managers for the purpose of driving up the profits per square foot of retail selling space may be highly utilitarian for shareholders, senior executives and other stakeholders, yet is egregiously unfair and unethical to workers. Drogin (2003) highlights the wage, benefits, and advancement opportunities are drastically out of balance between part-time, full-time and women who work for Wal-Mart as sales associates. For the utilitarianism of providing shareholder value, inequalities are needed from the associates to attain the higher profits. If Wal-Mart paid at wages that would give associates a higher quality of life, their revenue growth driven from massive investments in infrastructure would not be nearly as impressive.
"As Stone (1975) advocates that corporations first and foremost have the responsibility to deliver revenue growth and a solid return on investment to shareholders and don't really have a requirement for delivering CSR-related initiatives and support for the many unmet needs in their communities, Friedman (1970) accentuates this position by saying that corporate executives have no responsibility to deliver CSR benefits and initiatives"
Abstract This paper deals with the development of a compensation system within an organization. It lists pros and cons and why they are list as such. Obviously depending on which side you are looking will depend whether it is a pro or a con. Therefore the paper discusses the employee and employer relationship and goals.
From the Paper "When an individual is pursuing a new position in the workforce there are many criteria that he/she should consider before accepting a new position. Often we look at pay scale alone and overlook other elements, which should be important to our overall fulfillment within a potential job. These elements should not only be included but should play an important role in we accept and decide to keep a specific position. In addition to this, whether you need them or not, health care is an extremely important benefit which employers must try to provide. Regardless the employer should not try to gain the smallest amount of compensation in order to gain an employee but should be fair in his benefits package as well as his salary offerings. Philosophy: Obviously employers want the best of the best, but this is often difficult to see just from the interview and resume process."
Abstract The paper discusses how companies use compensation as a means of employee motivation. The paper examines various methods of worker's compensation, including 'equity-based' compensation plans, wherein ownership of the company is offered to the top workers of the company. The paper further examines incentive plans such as 'profit-sharing', wherein the company will undertake to donate a small percentage of its pre-tax profits to a savings pool, which would later on be divided among deserving employees. The paper concludes that a good compensation plan leads to better employee motivation, and increased efficiency, output and productivity.
Outline:
Definitions of Compensation Goals of compensation Different types of compensation plans generally used by a company
Methods generally used to determine compensation Why do compensation packages differ?
Conclusion
References
From the Paper "As far as human resources are concerned, compensation refers to the pay structures within any particular organization. Some of the primary issues regarding compensation are: how much is a company to pay a worker, in order to attract him, and then keep him, and then keep him completely motivated so that he does not move over to another company. Must the company offer to pay the employee a salary, or rewards? Must the company pay benefits to its workers, and if so, what must be the amount, and how exactly must it be paid? Can there be a distinct difference regarding the pay scale for high performers, as compared to that of lower performers? Would it be a better idea if the company were to provide stock options and stock bonuses for the employees of the company?"
Abstract This paper examines some of the current issues of executive compensation and how prevalent the situation has become. Some of the topics discussed include agency theory, CEO influence over the Board of Directors and CEO compensation - justification and ethics. Lastly it compares CEO compensation in the U.S. and abroad with a look at some outrageous perks.
Outline:
Introduction
Agency Theory
Agency Theory and Executive Compensation The "Golden Parachute" and Reasons for It
Board of Directors Influence over CEO Compensation/CEO Influence Over BOD
Is CEO's Compensation Ethical?
Executive Compensation in US Compared To Other Countries
Japan
China
Korea/Taiwan
France
India
Germany
Britain
Results
Top 3 Paid CEO's In 2006
Richard Fairbank
Bruce Karatz
Henry Silverman
Outrageous CEO Perks
Conclusion
From the Paper "Very few if any CEO's are capable of turning around a failing business on their own; it requires the assistance of every employee. The first to feel the pressure of the failing company is the employee who is given a pink slip. At the same time, the CEO is collecting a salary that could be up to 500 times greater than the common worker. The question becomes does the CEO value his workers? The answer would have to be no, as long as he continues to collect on their parachute even after the company goes bankrupt.The fairness to workers who have lost jobs or had pay levels or benefits reduced in some form while the CEO's are receiving these exorbitant amounts has become an ethical issue. The Golden Parachute has become so lucrative for CEO's that the IRS has developed the Golden Parachute Audit Techniques Guide (Bailey, 1999)."
Abstract This paper discusses current workers' compensation reform. The problem presented in this paper is that although reform measures like Senate Bill 899 have had a positive effect on workers' compensation, particularly to making it more efficient, it has had a substantial effect on the way workers' compensation is done. However, reform also means that the workers' compensation practitioner has to make internal adjustments. This paper first presents an overview of the specific changes created by Senate Bill 899 and, second, makes specific recommendations as to practice changes that the workers' compensation practitioner will have to abide by in order to continue to have a profitable and compliant workers' compensation practice. The paper focuses only on the changes created by Senate Bill 899 as they effect the attorney and practice of the plaintiff's side of workers' compensation.
Outline:
I. Introduction
A. Background
B. The Problem
C. Purpose
D. Scope
II. Overview of Senate Bill 899
III. Effects of Senate Bill 899
A. Procedural Changes
B. Financial Impact
C. Retraining Issues
D. Penalties for Noncompliance
IV. Conclusion
From the Paper "Senate Bill 899 was enacted as a means to attempt to save jobs, reduce the costs of carrying workers' compensation insurance for employers, and improve the overall care available for the injured workers. The law was passed by the legislature with overwhelming, bipartisan support and was signed into law on April 19, 2004 by Governor Schwarzenegger. In summary, the reforms provided by Senate Bill 899 focuses primarily on controlling the ever-escalating costs of medial treatment. At the time of the bill's passing, medical costs accounted for fifty-one percent of every dollar and indemnity benefit, which accounted for forty-nine percent of every workers' compensation dollar spent. These expenses had all significantly risen over a period of less than ten years. For example, in 1997 it was estimated that California employers paid a total of $3.4 billion dollars in indemnity costs. By 2003 this number was at an estimated $5.8 billion. In 1997 an estimated 2.6 billion in medical costs was paid, whereas by 2003 the number had increased to $6.1 billion. Finally, the total costs spent by all California employers on workers' compensation (indemnity, medical, etc.) was at an estimated $8.3 billion in 1997. By 2003 this number was at an estimated $26.7 Billion. It was this problematic trend that Senate Bill 899 was aimed at reversing, or at least controlling."
Abstract This paper discusses executive compensation schemes within organizations. It specifically analyzes whether chief executive officer (CEO) stock options and other executive compensation align with Home Depot or Lowes' long-term performance with shareholder interests. The paper discusses the positive and negative aspects of executive compensation schemes.
Table of Contents:
Compensation and Executive Compensation Does CEO Stock Options and Other Compensation Align the Company's Long Term Performance with Shareholder Interests?
The Positive Side
The Negative Side
Home Depot and Lowes
Home Depot
Lowes
The ESOP Woes
Appendix
From the Paper "The avenue that began as a small way has come to occupy the biggest legal money making methodology since greenhorns in dotcom companies were offered stock options during times when the going was good. Things cannot get worse than this. Subsequently, not to be left behind, auditors also joined the party. Because of this, it is found that companies that have never shown profits are quoted at fantastic prices. The bane of all this has been the stock option plan and the sooner it is abolished, the better. The CEO should be paid bonuses solely on the net profits he shows as a result of his performance. This is because the CEO is a paid professional and never an investor or a speculator. Any conflicts of interests must not be present. In case he is desirous of owning company stock then they must purchase at market prices just like any ordinary shareholder does with his personal finances. If this is not done, nothing can stop the CEOs in their pursuit of looting the corporation, albeit legally through ESOPs. (Executive Compensation)"
Abstract This paper looks at how employers' cost for workers' compensation has increased more rapidly than payments for benefits and medical care. The paper first discusses the hard realities that must be dealt with regarding compensation and the factors that affect compensation. The paper then looks at sex, race and social inequities in the granting of social insurance benefits, as well illegal employment with regard to compensation. Intermediate sanctions on healthcare and the ruling that non-lawyers could no longer represent employers at unemployment compensation hearings are also discussed. Lastly, the paper discusses how mental pay for stress is not proportional to the demand and looks at several court cases dealing with compensation for mental stress.
Outline:
Background: Rising Trends in Recent Years
Higher Educational Requirement, Market Fluctuations
Sex and Race Inequities
Illegal Employment
Intermediate Sanctions on Healthcare
Lawyers Now Required in Court
Mental Pay for Stress Not Proportionate to Demand
From the Paper "A 2004 study conducted by the National Academy of Social Insurance found that employers' cost for workers' compensation had increased more rapidly than payments for benefits and medical care (Fogg 2006). This was impelled by the increase in premiums by insurers for future benefit costs. Cash benefits for injuries and medical conditions also went up by 2.3% to $56 billion and employers' costs, by 7% to $87.4 billion. This was the trend in the first three years in the current decade, according to the National Academy of Social Insurance. Chairman of the panel, which produced the report, John E. Burton, said that increasing employer costs were due to rising premiums paid to cover future benefit costs. He predicted a cycle of ups and downs to occur in the market. He explained that employer costs went down in the 1990s when favorable investment returns motivated insurance companies to cut premiums so they could expand market shares. But after 2000, low interest rates and low stock market returns impelled them to raise premiums in order to cover future benefit costs, he explained (Fogg)."
Abstract This paper discusses and responds to questions related to HR strategies and particularly issues surrounding compensation strategies. It focuses on how compensations strategies support and augment an organization's long-term strategy. It discusses the result of the observation that HR compensation strategy should apply a performance incentive to its managerial corps but refrain from this same compensation structure for its line or production employees. The author claims that rather, line or production employees should receive an above average total compensation package that establishes value.
From the Paper "Human resources (HR) management has become the one of the last remaining functional areas of an organization where differentiation can be achieved in the marketplace and where competitors might still be appreciably out performed. The reasons for this revolve around the ubiquitous and relative inexpensive character of technology and technological applications that have leveled the competitive field across all industries. Essentially, no matter where a company is located it can access and deploy the very same technological solutions as any other competitor; thus, organizations have determined, and correctly so, that human resources are a vital source of competitive edge if managed properly. This opinion is supported by researchers who correctly purport that HR might soon evolve into an organization's leading strategic focal point: "differentiated, results-based strategies and plans for different workforce segments...envision the need for more vital contributions from HR in HR and business strategy ..."
