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雷达卡
Consider a publicly listed company in the UK or in the US of your own choice. Suppose that the board has asked you to write a report on the design of a new compensation package to the top executive. Your report should have the following structure:
- Introduction: about 1 page description of company such as
market situation, product line
-
historical background including stock price
-
financial situation
-
description of current top executive such as his background and length of tenure.
- Analysis: (i)about 1 page description of principles for compensation and (ii)about 3 pages discussion/analysis of compensation package.
- Conclusion (about 1 page).
The analysis should conclude in specific recommendations with respect to:
·
Level of total pay
·
Strength of incentives
·
Options (what type? which exercise price?), bonuses (made conditional on what?), stocks
·
Subjective performance indicators that might be included in pay package (indicators that could be difficult to quantify)
·
Benchmarking/indexing vis-à-vis other companies
The analysis can assume that the CEO currently is on a salary contract (i.e., I do not want a discussion of the existing pay package). The conclusion should, however, briefly describe the existing pay package and discuss how your recommendations differ from the actual pay package in place.
You are encouraged to relate the analysis to strategic features of the company such as product market conditions (e.g., are there close competitors? Who? How will the pay package relate?) and financial conditions (e.g., could there be a free cash flow problem?). To the extent possible, you are also encouraged to relate your analysis to the outside options for the CEO (his labor market opportunities).
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