A company is considering improving the methods of remuneration for its senior employees. As a member...
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A company is considering improving the methods of remuneration for its senior employees. As a member of the executive board, you are asked to give your opinions on the following suggestions: (a) (b) A lower basic salary with usual 'perks' plus a bonus related to their division's profit before tax A lower basic salary with usual 'perks' plus a share option scheme which allows senior employees to buy a given number of shares in the company at a fixed price at the end of each financial year Required A high basic salary with usual 'perks' such as company car, pension scheme etc but no performance-related bonuses (c) Discuss the arguments for and against each of the three options from the point of view of both the company and its employees. Detailed comments on the taxation implications are not required. A company is considering improving the methods of remuneration for its senior employees. As a member of the executive board, you are asked to give your opinions on the following suggestions: (a) (b) A lower basic salary with usual 'perks' plus a bonus related to their division's profit before tax A lower basic salary with usual 'perks' plus a share option scheme which allows senior employees to buy a given number of shares in the company at a fixed price at the end of each financial year Required A high basic salary with usual 'perks' such as company car, pension scheme etc but no performance-related bonuses (c) Discuss the arguments for and against each of the three options from the point of view of both the company and its employees. Detailed comments on the taxation implications are not required.
Expert Answer:
Answer rating: 100% (QA)
Option a High Basic Salary with Perks No Performancerelated Bonuses For the Company 1 Stability in CostsA high basic salary provides predictability in labor costs for the company which can be advantag... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0077826482
3rd edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips
Posted Date:
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