Crafting a settlement package for an organization's chief executive officer (CEO) that will help the firm optimize its performance is a vexing challenge for a board of directors. Management theory offers several practical breaths to boards.
A board can place its CEO as well as the firm in the most effective place to achieve success by (1) creating powerful incentives for CEO to react to the firm’s prominent interest at all the times; (2) benchmarking the CEO’s performance and the compensation in relation to that of quite high performing CEOs in the business;(3) evaluating and giving answer to CEO’s feelings corresponding to equity relative to their peers; (4) paying out the CEO with the uniquely precious knowledge, skills, and means at the top of the marketplace; (5) offering retention incentives if a proven performer with unique skills is leading a company; (6) resisting the desire to simply mimic the compensation packages that work for leading companies; and (7) considering nominees' societal ties when recruiting a new CEO.
PUBLICATION DATE: September 11, 2013 PRODUCT #: BH550-PDF-ENG
This is just an excerpt. This case is about ORGANIZATIONAL DEVELOPMENT
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