COMPENSATION MANAGEMENT
HRM3705
Study unit 10
Compensating executives
Prepared by Magda Bezuidenhout,
, Learning outcomes of study unit 10
Once you have completed study unit 10, you should be able to:
• Discuss the
Di th structure
t t off executive
ti compensation
ti
• Critically discuss the principles and processes of setting executive
compensation
p
• Indicate how corporate governance and executive remuneration fit
together
• C iti ll di
Critically discuss th
the structure
t t off executive
ti pay and
d whether
h th it iis ffair,
i
ethical and linked to performance
• Discuss the role of remuneration committees in executive
compensation
• Discuss how to set CEO pay
Prepared by Magda Bezuidenhout,
, Who are executives?
• An executive is a person or group responsible for the
administration of a project,
project activity,
activity or business and a
chief executive is the person with overall responsibility
for the efficient running
g of a company,
p y, organization,
g , etc.
• A simplistic approach in defining an executive is to say
that anyone
y who has a real influence on a company'sp y
profits is an executive.
• A key employee is an employee with a major ownership
and/or decision-making role in the business. Key
employees are usually highly compensated. They may
also receive special benefits as an incentive both to join
the company and to stay with the company.
Prepared by Magda Bezuidenhout
HRM3705
Study unit 10
Compensating executives
Prepared by Magda Bezuidenhout,
, Learning outcomes of study unit 10
Once you have completed study unit 10, you should be able to:
• Discuss the
Di th structure
t t off executive
ti compensation
ti
• Critically discuss the principles and processes of setting executive
compensation
p
• Indicate how corporate governance and executive remuneration fit
together
• C iti ll di
Critically discuss th
the structure
t t off executive
ti pay and
d whether
h th it iis ffair,
i
ethical and linked to performance
• Discuss the role of remuneration committees in executive
compensation
• Discuss how to set CEO pay
Prepared by Magda Bezuidenhout,
, Who are executives?
• An executive is a person or group responsible for the
administration of a project,
project activity,
activity or business and a
chief executive is the person with overall responsibility
for the efficient running
g of a company,
p y, organization,
g , etc.
• A simplistic approach in defining an executive is to say
that anyone
y who has a real influence on a company'sp y
profits is an executive.
• A key employee is an employee with a major ownership
and/or decision-making role in the business. Key
employees are usually highly compensated. They may
also receive special benefits as an incentive both to join
the company and to stay with the company.
Prepared by Magda Bezuidenhout
