Executive Pay

Executive Pay

Some evidence suggests that there is a direct and positive relationship between a firm’s size and its top-level managers’ compensation. Explain what inducement you think that relationship provides to upper-level executives. Recommend what can be done to influence the relationship so that it serves shareholders’ interests.

Top level managers are the decision makers and the risk assumers hence they are always paid quite high and their compensation consummates with the level of risks they are willing to assume. Very critical decisions are taken by them hence the bigger the organization the higher is the top level manager’s compensation in the wake of the very strategic leadership position each of them has to portray. Added to that the organizations are known by the leadership and the top level managers. Since the managers lend credibility to the organizations they need to be compensated better. Upper level executives are seniors in the organization and so they are the ones who bring about the growth trajectory of the organization and make it market leaders so if the company grows the interests and returns to shareholders also grows. Shareholders need to accept that compensation to top executives need to be aid so that they can take decisions and design company revenues. In order to induce positive reinforcement of compensation package to executives, such a proposal should be put forth in the general body meeting so that the responsibilities and accountabilities of upper level executives are understood and positive reinforcement between shareholders and upper level executives happens.

DQ 2

The case study outlines six specific strategies that the firm has chosen to support its strategic direction. Determine which strategy is most likely to benefit the firm. Explain your rationale.

I would have to say that the best strategy for this firm would be branding. By building and enhancing the brands they already have they can close in on the customers who love that brand. For example, Dr. Pepper has a few different flavors but people only know that when they go to fast food restaurants because they don’t sell these flavors in stores or super markets. I think that they should rebrand their products and began a new marketing strategy to allow all of their products to be recognized and they will probably sell more.

Briefly outline at least one other strategy the firm could take to support its strategic direction. Illustrate why this new strategy would be successful.

I would say strategic direction would be another strategy because the company has to be smart and understand that the way they promote their product to consumers will be the way they will always see that product. The company must be sure that the type of branding and marketing they are doing is best for the type of market they are serving. If all they have is high fructose sodas and juices then they cannot market to a region who are health nuts that shop only at whole foods markets. They would need to market their healthy alternatives to those people in that market