GE’s executive compensation system is comprised of four parts: salary and bonus, stock options and stock appreciation rights, restricted stock units, and long-term performance awards. These four parts make up the basic compensation system GE offers to all of their executives
2. Evaluate each of the components of the system. What are the purposes, pros and cons of each. To begin with, GE pays salary and bonuses for a couple of reasons. They explain that the salary is used to attract and retain their superior leaders because they need a way to get these employees in the door. Once they are there, they can then award them for their performance year after year with bonuses. This is fairly basic and great way for compensating employees on the …show more content…
What further changes would you recommend to executive comp at GE? I feel as if GE has a strong compensation plan set in place. Their salary and bonuses for their top executives are what get them into the company, and they have it arranged so that they retain that top talent for many years through various different long term incentive plans such as RSUs and stock options. This method of low turnover allows GE to keep a unified team together and allows them to be one of the most successful companies in the world.
The further changes I would recommend to compensation at GE would be to offer some type of nonfinancial plans for their top executives. Different types of perquisites will not necessarily keep and executive with the company over an extended period of time, however, it can and will make their lives easier and happier while they are with the company. For example, GE could offer a company plane that is accessible to all executives for their business needs, but especially those where traveling is a large part of their job. Another example could be offering company cars where the executives do not have to worry about maintain the car, rather there sole focus can be working towards the company, and making it better. There are various different perks that the top executives should be able to choose from, but like I said before, these types of things will not keep and executive with the company, rather it will make their time there more
2. Evaluate each of the components of the system. What are the purposes, pros and cons of each. To begin with, GE pays salary and bonuses for a couple of reasons. They explain that the salary is used to attract and retain their superior leaders because they need a way to get these employees in the door. Once they are there, they can then award them for their performance year after year with bonuses. This is fairly basic and great way for compensating employees on the …show more content…
What further changes would you recommend to executive comp at GE? I feel as if GE has a strong compensation plan set in place. Their salary and bonuses for their top executives are what get them into the company, and they have it arranged so that they retain that top talent for many years through various different long term incentive plans such as RSUs and stock options. This method of low turnover allows GE to keep a unified team together and allows them to be one of the most successful companies in the world.
The further changes I would recommend to compensation at GE would be to offer some type of nonfinancial plans for their top executives. Different types of perquisites will not necessarily keep and executive with the company over an extended period of time, however, it can and will make their lives easier and happier while they are with the company. For example, GE could offer a company plane that is accessible to all executives for their business needs, but especially those where traveling is a large part of their job. Another example could be offering company cars where the executives do not have to worry about maintain the car, rather there sole focus can be working towards the company, and making it better. There are various different perks that the top executives should be able to choose from, but like I said before, these types of things will not keep and executive with the company, rather it will make their time there more