Discussion Grasso – Assignment Example
Grasso’s Pay Package Executive compensation is a tricky business for the management team of any organization, especially when public opinion seems directly influential like it is for government corporations. Where the organization is at the centre of scrutiny for being a non profit entity, it can not be more risky than it is for the New York Stock Exchange (NYSE).
While we cannot completely repay human resource input using measurable estimates due to its invaluable contribution to business, several issues must be considered when setting a fair and justifiable pay package (Ellig 117). There was nothing to wrong with Grasso’s pay package figures, but the manner in which the process went on to arrive at the final figure aroused speculation.
Independence of the organization’s committee setting the pay package should not be compromised, or should at least appear to be independent. Questions on whether the committee acted within reasonable standards when allocating Grasso’s pay package can be twisted by their appointment which was his responsibility. Besides the appointment responsibility executed by Grasso over the committee, the management team support of the pay package could only trigger more speculation and outcry since they were not better placed than Grasso to raise sentiments on the issue. Inquiries reported grave inconsistencies in the conduct of the committee as well as the management (Lipman & Hall 95).
It can only be unclear to the critics, after analysis on the entire package system worked on by the committee. Internal and external control measures in NYSE could not be translated to direct the lack of proportionate increase in an officer’s pay package. Management expertise could have easily detected any understatements and the risks thereon assessed before the setting exorbitant package to Grosso.
Ellig B. R., The complete guide to executive compensation, New York, NY, McGraw-Hill Publishers, 2007.
Lipman F. D. & Hall S. E., Executive Compensation Best Practices, Hoboken, NJ, John Wiley & Sons, 2008.