In an economy where compensation is increasingly driven by “pay-for-performance” strategies, executive pay is no different. According to the 2012 EAA National Executive Compensation Survey, base salary accounts for approximately 75% of the total compensation package in Northeast Ohio. In theory, by focusing on variable pay, such as bonuses and other short term incentives, organizations are able to more closely tie executive pay to performance. However, a new international report by PricewaterhouseCoopers suggests that for many of the executives surveyed, certain types of variable pay, namely those associated with high levels of uncertainty, may not be an ideal driver of performance.
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