3. WHAT IS EXECUTIVE REMUNERATION
The financial payments and non monetary
benefits provided to high level management in
exchange for their work on behalf of an
organization.
5. FEATURES OF EXECUTIVE REMUNERATION
1. Managerial Remuneration cannot be compared to wage and salary
schemes meant for non-managerial employees in organizations.
2. Managers are denied the privilege of having of having unions and
collective bargaining. Their competence and contribution are their
strength for determining their pay package.
3. Secrecy is maintained in respect of managerial remuneration. This is done
because no two managers in the private sectors, in the same grade receive
the same pay. Compensation and reward depends upon such factors as
competence, length of service, contributions and loyalty to the company
6. FEATURES OF EXECUTIVE REMUNERATION
4. Managerial pay is not supposed to be individual performance measure but
rather on the unit or organizational performance.
5. Manager’s compensation, is subject to statutory sealing.
7. COMPONENTS OF EXECUTIVE
REMUNERATION
SALARY
CEO
REWARD
BONUS
INCENTIVES
(LONG TERM)
PERQUISITES
8. SALARY
1. First component of executive remuneration.
2. Salary is supposed to be determined through job
evaluation.
3. Salary of the manager varies by type of job, size of
organization, region of the country and the type of
industry.
9. BONUS or PROFIT SHARING BONUS
Profit sharing bonus plays an important role in
today’s competitive managerial payment
programmes. This types of incentive is
generally shortened and is based on
performance or profit sharing.
10. LONG TERM INCENTIVES
Stock options are long term benefits offered to
managers. Companies allow managers to purchase
their shares at fixed prices.
11. PERQUISITES or PERKS
Any casual emoluments, free, and profit, attached to an
officer or position in addition to salary or wages.
Eg:-
• Free medical facility or reimbursement of medical
expenses,
• free facility of refreshments,
• entertainment,
• telephone,
• transport,
• Interest-free loan,
• Scholarship
• Leave travel concession
12. EXAMPLES OF FAMOUSE CEO’S
GETTING HIGH SALARY
N Chandrasekaran
MD & CEO,
Tata Consultancy Servics
Annual Salary: Rs 11.6
crore
