Factors affecting the salary Essay Example | Topics and Well Written Essays - 2000 words

Factors affecting the salary - Essay Example Executives receive a variable compensation that is known as executive bonus that is based on attainment of organisational goals and objectives. Managers also get long-term incentives that are based on the firms’ goals and objectives. Executive perquisites and benefits are different than those that are offered to subordinates. This means that they receive higher levels of pension plans, fringe benefits, life insurance and health insurance. The website states that the pay rates for executive compensation in the US are higher as compared to the situation in other countries. The situation is similar in other nations including Asia and Europe. It is also clear that managers have the option to increase their levels of compensation. This has attracted numerous ethical concerns over the years. The book starts by stating that the issue of executive remuneration has attracted increasing attention over the years especially following the 2008/2009 banking crisis. This leads to the important question on the factors influencing executive remuneration. The recent discussion has shifted from how much the executives make in a month to how much they can make from their firms. The book notes that executive remuneration has spawn out of control in the recent past. In fact, it has become clear that the bonuses available to executive are approximately seventy percent of their basic salary. The High Pay Commission found verification that high pay for executives has negative impacts for society and the economy at large. The same commission found that while executives’ salaries increased dramatically over the years, the share prices have been observed to have declined significantly. Generally speaking, the main factors influencing executive remuneration include the decisions by remuneration committees, inherent values of executives, competitive forces in the market. There are two main theories that can further explain this