Summary of Fair Pay, Fair Play
Aligning Executive Performance and Pay
Copyright © 2010 Jossey-Bass, an imprint of John Wiley & Sons
Despite popular opinion, not all CEOs are unjustly overpaid. Now there’s a way to find out which ones are.
Given increased public and government scrutiny of executive pay, corporate boards of directors are under more pressure than ever to implement reasonable, competitive compensation packages for their senior managers. Robin A. Ferracone now provides firms with the analytical tools they need to compare their practices with those of other firms and to understand how to set “fair pay.” Using her 30 years of experience as an executive compensation consultant, Ferracone offers a relatively simple concept – “pay for performance” – while outlining the actual complexity underlying the idea. She explains the detailed mathematics of deriving critical statistics, including total shareholder return and performance-adjusted compensation. Her case studies and examples of corporate largesse offer readers welcome relief from intense statistical analysis, even though they help sell her “Alignment Report” as the prescription for compensation committee woes. Still, getAbstract applauds her thorough research and recommends her findings to board members, senior executives and human resources professionals eager to pay – and play – fairly.
In this summary, you will learn
- Why companies need to define their individual concepts of “fair pay” and “fair play,”
- How the “Alignment Model” can help firms pinpoint their relative standing in compensation practices
- How to “align” executive pay with performance
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