Warren Buffet
Xavier University- Ateneo de Cagayan
School of Business and Management
Finm 8- D: Case Analysis No. 1
CEO COMPENSATION
Submitted By:
Bacang, Charlene
Bachinela, Marie Claire
De Mesa, Kristine
Espineli, Jesamae
Fuentes, Fatima
Gallega, Romulo
Gicole, Rose Ann
Submitted To:
Ms. Lilibeth Celesios
CEO COMPENSATION
PROBLEM The misalignment of compensation of the CEOs relative to their performance in their respective companies.
OBJECTIVES * To determine what is just compensation for CEOs * To come up with strategies that could be employed as a response to the rapid growth of executive compensation * To identify the proper actions to address issues about CEO compensation
AREAS OF CONSIDERATION * LEVELS OF MANAGEMENT 1. TOP LEVEL – CEOs, BODs 2. MIDDLE LEVEL – managers 3. LOW LEVEL – supervisors, rank and file
Employees on low level of management are the one who usually do/ execute the orders while managers on middle level are the ones who formulate certain tasks and policies. CEOs and BODs on the top level are responsible for approving the formulated tasks and policies, and also for decision making. * CORPORATE GOVERNANCE
A mechanism for aligning principal- agent interests and incentives encouraging accountability. It assigns the responsibilities, measures the performance, rewards and penalize managers in line with their impact on the company’s long-term value creation. It serves as kind of check and balance for a corporation to ensure that executive compensation packages attract and retain the right people, hasten the departure of the wrong people and provide incentives for high performance.
ALTERNATIVE COURSES OF ACTION 1. Changing corporate culture, which includes changing the basis for CEO compensation, providing new compensation plans, avoiding multi-period compensation packages 2. Regulating the present performance-based compensation programs of the companies, which includes
School of Business and Management
Finm 8- D: Case Analysis No. 1
CEO COMPENSATION
Submitted By:
Bacang, Charlene
Bachinela, Marie Claire
De Mesa, Kristine
Espineli, Jesamae
Fuentes, Fatima
Gallega, Romulo
Gicole, Rose Ann
Submitted To:
Ms. Lilibeth Celesios
CEO COMPENSATION
PROBLEM The misalignment of compensation of the CEOs relative to their performance in their respective companies.
OBJECTIVES * To determine what is just compensation for CEOs * To come up with strategies that could be employed as a response to the rapid growth of executive compensation * To identify the proper actions to address issues about CEO compensation
AREAS OF CONSIDERATION * LEVELS OF MANAGEMENT 1. TOP LEVEL – CEOs, BODs 2. MIDDLE LEVEL – managers 3. LOW LEVEL – supervisors, rank and file
Employees on low level of management are the one who usually do/ execute the orders while managers on middle level are the ones who formulate certain tasks and policies. CEOs and BODs on the top level are responsible for approving the formulated tasks and policies, and also for decision making. * CORPORATE GOVERNANCE
A mechanism for aligning principal- agent interests and incentives encouraging accountability. It assigns the responsibilities, measures the performance, rewards and penalize managers in line with their impact on the company’s long-term value creation. It serves as kind of check and balance for a corporation to ensure that executive compensation packages attract and retain the right people, hasten the departure of the wrong people and provide incentives for high performance.
ALTERNATIVE COURSES OF ACTION 1. Changing corporate culture, which includes changing the basis for CEO compensation, providing new compensation plans, avoiding multi-period compensation packages 2. Regulating the present performance-based compensation programs of the companies, which includes