January 2016
Intermediate to advanced
480 pages
20h 58m
English
4 Discuss the principles and processes of setting executive compensation.
We discussed the processes compensation professionals use to reward performance (e.g., merit pay and alternative incentive pay methods) and acquisition of job-related knowledge and skills (e.g., pay-for-knowledge and skilled-based pay) in previous chapters. Although pay-for-performance is the public rationale for setting executive compensation, reality is often quite different. Three alternative theories explain the principles and processes for setting executive compensation: agency theory, tournament theory, and social comparison theory. We will begin by discussing the key players in setting executive compensation. ...