Ceo Pay in the News

Case Study – CS10.1 20 Points

CEO Pay in the News

The goal of this Case Study is to analyze the Oakwood CEO compensation package and to recommend a communication strategy to employees. In order to accomplish this assignment you will need to review the case and refer to the material covered in Chapter 12.

Case summary and questions can be found on page 286 of the text.

* Review the case summary

* Answer the two questions

Exercise Guidelines:

* Name and Student ID number (last four numbers) should be typed and appear at the top of the page

* Page Topic: “Case Study – CS10.1 – CEO Pay in the News” should appear under the student name

* Minimum of one (1) page and no more than 2 (two) pages MS Word doc.

* MS Word doc., typed in an Arial 10 point font, single spaced

* Well written, no spelling errors or incomplete sentences

* If appropriate, include citations

* Answer the questions being asked in a direct and thorough manner

The quality of the response is more important than the length.

Q1. What additional information about the CEO’s Pay package should Don identify to potentially share with the employees?

Executive pay is comprised of several different components and Don should outline those specifically. CEO’s job do not fall within formal pay structures, their work is highly complex and unpredictable. It is not possible to specify discrete responsibilities and duties (Martocchio, 2014). The fact that his annual salary is $975,000, and his total compensation including bonus, stock awards, retirement benefits and other benefits is 10 million is a good representation that his base pay is a relatively small part of his total compensations. Also, depending on the theory used to set the CEO’s pay, Don may want to collect different information for which the CEO’s compensation is designed. For example, under agency theory, he may want to emphasize the CEO’s ownership in the company. Under social comparison, he may want...