MGMT449 – Ethan Campbell

When discussing executive compensation, I would have to lean more towards the excessive side of the argument. I understand that these individuals are experienced, have power, influence, expertise, and connections, however, these packages are insane. It can be important to bring these individuals in because they have the ability to tip the scale of a company, but is it truly worth it when they earn over five hundred times the average employee? I understand that these packages are set in place to keep them around and ensure success, but when do they stop? As in the PBS segment, “Executive Pay”, it’s a contagious effect where CEOs will just keep getting paid more. Their astronomical pay has to demoralize employees to a certain degree, especially when they never even met the individual. It is difficult to say what the right thing to do is, especially if your company does not pay them because someone else will. CEO pay should be altered slightly to reflect quarterly and annual profits more to ensure their success and dedication.
The PBS segment on “Executive Pay” did an excellent job of explaining why CEO pay has drastically reason. First, the board of directors considers the CEO to be the single most important factor in the future success of the company for the next five to ten years. They believe the influence and expertise this individual brings is the best thing for the shareholders and the organization. Additionally, with the board of directors, it is important to know that most of the time, the board of directors are CEOs themselves. They are going to be biased when discussing compensation because they know they can use it as leverage at their own company. Second, the stock market boom, starting in the 1990’s CEOs were given more stock options to buy company stock at a bargain price. Third, a survey was done, and it found that companies want to pay their CEO above-market or in the top 25%; because of this, the average is always rising due to companies are always having to outdo each other. It became a snowball effect of compensation rising. And lastly, with the growth of technology, surveys, and growing information, CEOs were able to see what other CEOs were making. This allowed them to utilize this information and further leverage their compensation.
As mentioned before, executive compensation should become more performance-based rather than company size. This should increase participation from CEOs and ensure they are doing everything in their power to help the company. When thinking about the board of directors, it is difficult to make changes because, on one hand, you could argue no CEOs so there is no bias, but is that the best decision? They are successful individuals, and you want them in your corner, but when discussing executive compensation do they have the best interest of the company or themselves? For there to be real change, I believe greater tax enforcement and transparency will be necessary.

The initial ranking that I came up with in class had flexible working time one and from there MBA reimbursement, PTO, campus resources, volunteer opportunities, and discount to product or service. After the class discussion the two I added to my list was 401(k) match and medical insurance. Those two would go directly after flexible working time. From the pandemic, I learned doing work online is easier than I thought and because of that, I invested in my computer/ desk setup at home. The option to also work at home would be fantastic, on those, I do not feel it’s necessary to go to campus or if I have to be somewhere else. Additionally, the option of working when I want and for how long I want is something I strongly desire. For me, academically speaking, I accomplish most of my work Monday through Thursday in the mornings. I want my evenings to myself and weekends for enjoying my hobbies. Having the flexibility of working when I want and where would motivate me the greatest. Next 401(k) match, investing is something I have taken seriously lately and understanding compound interest. I did not grow up with money, so I understand the importance of building wealth and working hard. Having a company that is also investing in my wealth would push me to work harder and stay loyal. Fortunately, my mom is a nurse educator, so I have always had phenomenal insurance growing up and want to continue that once I get booted off of it. Especially eye insurance as I have glasses and contacts. My top three would affect my employee behavior by increasing my productivity, loyalty, work ethic, and gratefulness. All of these benefits provide me with a piece of mind and would allow me to focus on performing and being the best version of myself.

When searching for jobs, we all have different priorities. A job I worked in the past was at a coffee shop, which fit my main priority: flexible scheduling. Other reasons I accepted the job were because the hourly wage was above minimum wage, received tips at the end of shifts, new merchandise monthly, and the environment. This job utilized both intrinsic and extrinsic compensation, but for this post, I will solely focus on intrinsic. When at this job I was always motivated to perform at a high level because hard work did not go unnoticed. The management did a superb job using intrinsic compensation. Whether it was during a shift, after a shift, a text message, or during a meeting they always complimented you on your performance. The feedback they always gave was genuine and meaningful. This was effective for them because when they needed extra help, they knew people would feel inclined as they felt important and proud. For me, when receiving this praise, it always boosted my morale and excitement to go to work. When everyone is uplifting and working their tail off, it creates for a positive working environment that everyone wants to be a part of. And once you have received that recognition it motivates from within, and you want to keep pushing yourself to show your value further. Those small gestures go a long way and keep people around longer than they expect.