PHR®/SPHR® Professional in Human Resources Certification Study Guide, Third Edition

6.6. Executive Compensation

As the complexity of managing organizations in a global environment increases, the need to attract and retain executives with the skills and talent to lead a company is even more critical for success. Executive compensation is a controversial subject for shareholders and, with the collapse of major corporations in the finance industry in late 2008, the focus of increasing scrutiny by federal and state regulators. The responsibility for negotiating executive compensation packages belongs to the board of directors (BOD). The BOD is expected to negotiate with executive candidates and incumbents "at arm's length," meaning that the negotiations are conducted with objectivity and in the best interest of the company. Since ...