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Posted: December 8, 2020
One issue that has come to the forefront of national debate lately is the topic of executive compensation. Many people believe that executives are paid too much and the gap between CEO salaries and wages has grown too distant. If you are an executive then this might leave you concerned about what might happen to your income in 2021. CEOs and top executives also come under more scrutiny than other professions because their pay is usually public knowledge. Luckily, there are a few steps that they can take to protect their income from being drastically reduced in the upcoming year. These are the best ways to maximize executive compensation in 2021.
Since most of the time executive compensation is linked directly to performance targets, it is very important that you hit these. According to a study in the Harvard Business Review, about 50% of executive base pay comes in the form of bonuses. If this holds true then there should be a huge emphasis on making sure you are meeting whichever performance goals have been assigned to you to earn income on top of your executive salary. You can also brainstorm new performance goals and bring them to your next negotiation.
On that same note, there are so many variables that CEOs or top executives need to account for when trying to meet their goals. For example, trying to reach a quarterly percentage increase in revenue will require increased performance from the sales team, marketing, customer service, the product team, and many others. There is a lot that goes into increasing revenue and lots of these factors may fall outside of the CEOs control. One factor that is outside of the executive’s control is the product offering and how it sits in the current market. Right now, there is a big division between industries that are thriving and industries that are sinking. If you are working in an industry that is sinking then chances are it will be tough to meet your performance goals (through no fault of your own). If you are comfortable making a switch then you should consider making a jump to a company that is poised to thrive under coronavirus conditions. Doing this will give you a better chance of profiting during 2021. A few examples of industries that are poised to have explosive growth in 2021 are:
Last, if you are interested in maximizing your executive compensation for 2021 make sure that you are diversifying the number of ways that you make money. As we mentioned earlier, there are a few ways that executives make money: Bonuses, Stock options and Base salary. One way that you can make sure you are maximizing your income is to ensure you are earning money from each of these three methods. If a raise in your CEO salary is out of the question then consider negotiating a performance-based bonus. Additionally, you can increase your stock holdings with the expectation that your hard work will lead to an increase in the companies stock price. To learn more about maximizing executive salary, visit our Contact Page, or contact us directly by email at fglassner@veritasecc.com or by phone at 415-618-6060.
