The idea is to utilise these benefits to drive the role model behaviours in the organisation. "Incentive plans have become key elements of top executive compensation. These plans are aimed at ensuring retention, driving business performance and/or recognising role model behaviours," Upadhyay said.
According to Hay Group, employee stock options continues to be the most prevalent long-term incentive option as 57 percent of companies opt for this plan, followed by performance shares and restricted shares. The report added that difference between the MD/CEO salaries to that of other top executives roles has reduced over the years, indicating that these are being considered as important stakeholders. "Clearly, organisations are moving towards valuing the top team executives below the MD/CEO as equal stakeholders in business performance," Upadhyay said.
He added that a significant part of the compensation of these roles is variable in nature, with a link to business performance, which only strengthens the fact that these are considered high impact roles.
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