19-03-2014, 02:20 PM
COMPENSATION OF THE TOP MANAGEMENT AND ITS STRATEGIC AND ETHICAL PERSPECTIVE
ABSTRACT
‘The best compensation policy is not based upon the organizational affiliation among the stake holders and the administration, but also taking into consideration the difference of opinion which give birth to conflicts in other constricting relationships which exist in the organization. In the article the finest compensation plan is revised taking into the consideration the two most important factors which are (1) equity and risky debt, and (2) equity and convertible debt. Future, the benefits of making parallel administration compensation with the stake holders welfare are discussed, that this action will reduce the cost of debt’. (John., John 1993)
‘The study shows that the control and the ownership of the firm play a vital role in determining the compensation plan for the executives of the organization. The study displays that when a firm is externally controlled by the shareholders than the company is more efficient in compensating its CEOs and the top-management rather than the firm which are internally controlled by the administration. One major reason for this cause is that the segregation of compensation plans and the performance of the firm, on the other hand externally controlled companies have learned the art of inclusion of the compensation of the top management and the performance of the firm in terms of the profit.’ (Mejia, Tosi, Hinkin 1987)