Get a Free E-Book! ($50 Value)
HIRE A WRITER!
Paper Types
Disciplines
Get a Free E-Book! ($50 Value)

Compensation Structures and Strategic Planning, Essay Example

Pages: 1

Words: 380

Essay

McKesson is a drug wholesaler in the United States that has recently come under fire for the manner in which their compensation policy is ineffective, weak and many way unjust. This is because the compensation policy for high ranking officials, such as the CEO is purely based on the profitability of the company regardless of any losses, in terms of company assets, that are incurred under their tenure. (Silverman, 2013)

In recent years, McKesson has paid out over $1 billion to resolve legal and regulatory issues and disputes. Despite this, the company’s CEO received compensation to the tune of $131 million in 2012 (Silverman, 2013). The compensation policy at McKesson does not apple any “Clawback Policy” within their compensation strategy.

The company has in the last recent years lost a significant amount of assets due to the increasing number of legal and regulatory cases levelled against it. However, the value of these lost assets has not been recovered in any way. This is regardless of the fact that the CEO continues to receive incredible amounts in compensation. The flaw in the McKesson compensation policy is that misconduct is defined as actions that are on an international level, irrespective of the harm caused by such activities, as long as they do materially harm McKesson (Silverman, 2013).

This compensation policy may be improved by instituting a pay-for-performance policy for executives. This would be geared towards discouraging the executives in activities that may inflict significant financial damage to McKesson. Furthermore (Greene, 2010), instituting a “Clawback Policy” would further deter senior executives from such behaviour. The “Clawback Policy” would ensure that in the case where significant financial harm comes to the company under an executive’s tenure, such loss would be recovered from the respective executive’s compensations.

References

Greene, R. J. (2010). Effectively managing base pay: Strategies and programs for success. Society for Human Resources Management.

Sammer, J. (2007). Weighing Pay Incentives. HRMagazine, 52(6).

Silverman, E. (2013, July 30). McKesson Fights Big Investors Over A Clawback Policy. Retrieved from Forbes.com: http://www.forbes.com/sites/edsilverman/2013/07/30/mckesson-fights-big-investors-over-a-clawback-policy/

Smith, S., & Mazin, R. (2004). Compensation: How should employees be paid? In S. Smith, & R. Mazin, The HR answer book : an indispensable guide for managers and human resources professionals (pp. 98-116). New York: AMACOM.

Society for Human Resource Management. (2010). Introduction to the human resources discipline of compensation. Society for Human Resource Management.

Time is precious

Time is precious

don’t waste it!

Get instant essay
writing help!
Get instant essay writing help!
Plagiarism-free guarantee

Plagiarism-free
guarantee

Privacy guarantee

Privacy
guarantee

Secure checkout

Secure
checkout

Money back guarantee

Money back
guarantee

Related Essay Samples & Examples

How Did Technology Affect the Civil War? Essay Example

The America Civil War became the first modern war due to the application of technology. Technological advancement had a significant impact on the American Civil [...]

Pages: 1

Words: 2058

Essay

Primitivism, Essay Example

Primitivism is a style of artwork mainly practiced by self-trained artists who cultivate their talents in an imaginary and renewed method. The ideas and elements [...]

Pages: 1

Words: 631

Essay

Europe and the Making of Modernity From 1815-1914, Essay Example

Hi. I just want to share with you a reading experience I have had when I read the book by Robin Winks entitled Europe and [...]

Pages: 1

Words: 268

Essay

My Passionate, Essay Example

My passion relates to finding the truth and understanding the world and this has played a vital role in my storytelling hobby. My father was [...]

Pages: 1

Words: 725

Essay

Abuse by the NHS: Patient Consent and Confidentiality, Essay Example

Introduction Incidences of identity theft have been on the rise in recent years. Most recently, medical identity theft crimes have risen also-although this is something [...]

Pages: 1

Words: 1014

Essay

Guide to Successfully Completing Your Dissertation, Essay Example

Writing a dissertation can be an overwhelming experience that can be scary, stressful, and can be the ticked to receiving doctoral status. The in completing [...]

Pages: 1

Words: 638

Essay

How Did Technology Affect the Civil War? Essay Example

The America Civil War became the first modern war due to the application of technology. Technological advancement had a significant impact on the American Civil [...]

Pages: 1

Words: 2058

Essay

Primitivism, Essay Example

Primitivism is a style of artwork mainly practiced by self-trained artists who cultivate their talents in an imaginary and renewed method. The ideas and elements [...]

Pages: 1

Words: 631

Essay

Europe and the Making of Modernity From 1815-1914, Essay Example

Hi. I just want to share with you a reading experience I have had when I read the book by Robin Winks entitled Europe and [...]

Pages: 1

Words: 268

Essay

My Passionate, Essay Example

My passion relates to finding the truth and understanding the world and this has played a vital role in my storytelling hobby. My father was [...]

Pages: 1

Words: 725

Essay

Abuse by the NHS: Patient Consent and Confidentiality, Essay Example

Introduction Incidences of identity theft have been on the rise in recent years. Most recently, medical identity theft crimes have risen also-although this is something [...]

Pages: 1

Words: 1014

Essay

Guide to Successfully Completing Your Dissertation, Essay Example

Writing a dissertation can be an overwhelming experience that can be scary, stressful, and can be the ticked to receiving doctoral status. The in completing [...]

Pages: 1

Words: 638

Essay

Get a Free E-Book ($50 in value)

Get a Free E-Book

How To Write The Best Essay Ever!

How To Write The Best Essay Ever!