Discussion – Executive Pay
After identifying the executives to work for a company, the next step is to ensure they do not leave. Most employment negotiations fall apart due to rigid positions taken by employers. Therefore, it is crucial to listen to the executives’ expectations before setting pay. Some of the common components of executive pay across industries include; base pay, benefits, executive perks, among others.
Base pay
Base pay determines the talent of executives a company attracts and retains. Before deciding on this, it is vital to benchmark what competitors in the industry offer. It is also essential to listen to what expectations executives have before recruiting them (Conyon, 2006). Another vital aspect to consider before mentioning an offer is the executives’ open market value, which reveals their expectations (Conyon, 2006). Adjusting pay to the ever-changing living standards will also come in handy. However, it is essential to consider what a company can afford while doing this.
Incentives and Bonuses
Organizations also offer annual bonuses and incentives to their employees based on profits or sales. Such bonuses can sometimes be fixed based on the type of organization. Performance-based pay methodologies help organizations to motivate executives to perform better (Conyon, 2006). By striving to get better pay, executives help organizations attain their objectives. Companies need to be flexible while structuring the type of benefits they can offer their executives. For instance, older executives may prefer health payment plans for themselves and their families instead of paid vacations.
Executive Perks
Executive perks or sweeteners are offered to executives who multiple companies pursue to convince them to stay. Although it has received media backlash, some companies go out of their way to appease their executives (Adithipyangkul, Alon & Zhang, 2011). Examples include signing executives into sports clubs or paying for vacation homes, among others. Executive perks are usually custom-made.
References
Adithipyangkul, P., Alon, I., & Zhang, T. (2011). Executive perks: Compensation and corporate performance in China. Asia Pacific Journal of Management, 28(2), 401-425.
Conyon, M. J. (2006). Executive compensation and incentives. Academy of Management Perspectives, 20(1), 25-44.
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Question 
Executive Pay
Being unable to retain an executive negatively affects an organization’s sustainability and growth. Share at least three components of an executive compensation package. Justify how those components will work to retain an executive in the company.