erhart & Newman (2020) discuss how compensation (pay) may be a measure of justice, i.e., gender, race, culture, etc. They further state that stockholders are interested in executive pay. Why does it matter, and how is it fixed? How risky are these decisions to employee retention?
Gerhart & Newman (2020) discuss how compensation (pay) may be a measure of justice, i.e., gender, race, culture, etc. They further state that stockholders are interested in executive pay. Why does it matter, and how is it fixed? How risky are these decisions to employee retention?
It is essential because executives act as agents for investors or owners. The executive should guide the organization to growth and success while effectively and efficiently employing resources available to them. Hence, it is imperative that what decisions are taken by the executive and what actions are taken up by the executives in different circumstances. So, the stockholders must prevent agency conflict and prevent executives from making decisions that benefit them more than the stakeholders.
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