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CEOs’ Compensation

CASE FLYER, HUMAN RESOURCE MANAGEMENT
ET Cases, 5 pages
AUTHOR(S) : Vandana Jayakumar and Dr. Nagendra V. Chowdary

Case Preview

CEOs’ Compensation

 

Expected Learning Outcomes

• Analyzing the role of a CEO in various types of organizations
• Debating on the aspirations and anomalies in a CEO’s compensation

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The Role of A CEO

1. Consider the CEO/Head of institutions listed below and do an analysis as directed.

  • i. Start-up
  • ii. SME
  • iii. Large company
  • iv. MNC
  • v. NGO/Trust/Non-profit organization
  • vi...............

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CEOs’ Compensation: Aspirations and Anomalies

1. How do you think, the compensation for a CEO should be structured? You can refer to the list of institutions given in the first question of this case flyer. What factors do you think should be considered while structuring CEO compensation?

2. Should age, qualifications, pedigree, nationality, the nature of work, gender, etc., decide the structure of CEO’s compensation?

3. ......................

Exhibits

Exhibit I: Likely Variables Deciding Compensation

Exhibit II: How the Money Stacks Up?

Teaching Note Preview

CEOs’ Compensation

 

Synopsis

This case flyer enables a discussion on the topic of CEO compensation with the main point of focus being ballooning CEO salaries and if it is appropriate to cap CEO salaries. The case flyer enables an understanding that the role of a CEO in different types of organizations varies and hence the CEO compensation for different types of companies would be different. Listing the reasons why it is pertinent to adequately compensate the CEOs, the case flyer suggests the various ways in which CEOs can be compensated. It is suitable for teaching the concept of compensation in Human Resource Management course. The case flyer also finds use in Management Development Programs (MDPs).

Expected Learning Outcomes

  • • Analyzing the role of a CEO in various types of organizations
  • • Debating on the aspirations and anomalies in a CEO’s compensation

 

Positioning and Setting

The case flyer can be used in the following courses:

  • a) Human Resource Management – Compensation
  • b) Organizational Behaviour – What to Pay: Establishing a Pay Structure
  • c) Management Development Programs (MDPs)

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Suggested Orchestration

Before the Case Flyer Discussion in the Classroom

a) The students were asked to read the list of India’s highest paid executives featured in the BUSINESS WORLD, December 2013 and they were also asked to refer to the list of India’s top paid executives as per Business Standard.

b) To help the students have an idea about executive compensation at the global level, the students were asked to refer to the list of ‘The 10 Highest-Paid Fortune 500 CEOs’

c) The students were also asked to read a related Harvard Business Review article titled “The Curse of a Superstar CEO”

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During the Case Flyer Discussion in the Classroom

The discussion on the case flyer was conducted under two broad topics: ..........

The flow of questions to be discussed in the classroom has been elaborated in Annexure (TN)-I: The Board Plan

I. The Role of a CEO

• Classroom discussion began with the first question of the case flyer, where the participants discussed the type of compensation the CEOs of various types of organizations were likely to command.

• The discussion was carried forward with the help of a matrix [Exhibit (TN)-I].

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Exhibits

Exhibit (TN)-I: Factors Deciding CEO Compensation

Exhibit (TN)-II: Designation vs Responsibility

Exhibit (TN)-III: Variables Deciding Compensation

Annexure

Annexure (TN)-I: Board Plan

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Product code: HRM-4-0014, HRM-4-0014A

Abstract


This case flyer focusses on CEO compensation and as mentioned in the accompanying article1 debates on the trend of high CEO compensation particularly in banking, financial services and consulting firms. Building a link between the role of a CEO and his/her compensation, the case flyer suggests that the role of CEO for different companies/institutions would vary and therefore CEO compensation would also differ accordingly. The case flyer gives an opportunity to find out ways in which CEO compensation can be structured given the kind of responsibility that a CEO shoulders. The case flyer is suitable for teaching the concept of compensation in Human Resource Management course and can also be effectively used in Management Development Programs.



Pedagogical Objectives

  • To analyze the role of a CEO in various types of organizations
  • To debate on the aspirations and anomalies in a CEO's compensation


1 Shiv Shivakumar, 'Is it a Good Idea to Cap CEO Earnings?', The Economic Times, December 17th 2013




This Case Pack Includes:
- Abstract
- Case Flyer
- Analysis
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