Compensation Plan Outline Essay Example | Topics and Well Written Essays - 1500 words

Compensation Plan Outline - Essay Example In addition to providing its employees with competitive salaries, the company undertakes regular review of the pay thus ensuring that the workers are equally compensated for their hard work. To ensure that the company gives competitive salaries, it benchmarks the pay against similar positions in the competing companies. Another aspect that makes PepsiCo compensation policy appropriate is the annual incentive compensation. By providing performance-related annual incentive compensation to the executives, their performance is enhanced thus increasing the profitability of the company. The 2004 EIC Plan is a policy that is adopted by PepsiCo in its executive compensation. During the compensation, the company considers financial position of the company, the company strategic position and the extent to which the managers motivate and manage other employees. Additionally, the company uses pre-approved earnings per share target to compensate its executives. Pepsi compensation philosophy entai ls long-term incentive compensation. According to the management team, the interest of company shareholders and those of the executive can be effectively aligned by providing stock-based incentives as well as stock ownership awards (Heneman, 2002).   . With a history of linking stock-performance to the employees pay, PepsiCo has benefited from effective compensation policy that is fair. In the same way, the company offers target grant to the executives once they meet their goals. Based on the stiff compensation in the soft drink industry.... Another aspect that makes PepsiCo compensation policy appropriate is the annual incentive compensation. By providing performance-related annual incentive compensation to the executives, their performance is enhanced thus increasing the profitability of the company. The 2004 EIC Plan is a policy that is adopted by PepsiCo in its executive compensation. During the compensation, the company considers financial position of the company, the company strategic position and the extent to which the managers motivate and manage other employees. Additionally, the company uses pre-approved earnings per share target to compensate its executives. Pepsi compensation philosophy entails long-term incentive compensation. According to the management team, the interest of company shareholders and those of the executive can be effectively aligned by providing stock-based incentives as well as stock ownership awards (Heneman, 2002). . With a history of linking stock-performance to the employees pay, Pepsi Co has benefited from effective compensation policy that is fair. In the same way, the company offers target grant to the executives once they meet their goals. Based on the stiff compensation in the soft drink industry, offering a target grant to the executives is an essential policy since it result to the attainment of the corporate goals. In this way, the company is able to effectively compete with Coca-Cola Company despite the latter being a market leader. To ensure that all the employees are motivated, it is imperative for employers to come up with appropriate beneficial ratio in their compensation system. Internally, Pepsi should ensure that employees in all the department earns three quarter of what the departmental mangers are earning. Through the ratio of 3:4,