Business Perspective

In the reading this week, you have learned about the different approaches that organizations may use in order to align management compensation with financial performance including the advantages and disadvantages of such compensation structures.

In this assignment, you will compare and contrast two organizations that have management compensation plans tied to organizational performance. You will essentially compare and analyze one company that you believe has been successful using this approach and evaluate another company that you believe has failed or exhibited poor results.

Key points of reference when completing this assignment will likely include:

• Annual Reports: Remember that all companies with publicly-traded securities in the U.S. are required to file their annual reports (Form 10-K) with the SEC. These can be retrieved at any time from the SEC website: sec.gov (Links to an external site.). The Annual Report will include the companys comparative consolidated financial statements when you can use the assess trends in operational performance and financial position. The reports will also include managements discussion and analysis (MD&A) as well as the footnotes to the financial statements. The footnotes will typically provide the details of any share-based compensation reported in the financial statements.
• Proxy Statements: Public companies will also file their Proxy Statements (labeled DEF 14A) with the SEC. The proxy statement will typically provide extensive details on corporate governance including director and executive compensation policies.

Requirement:

Select one company that you believe has been successful in using this type of plan. You may define success using a number of quantitative and qualitative metrics including but not limited to profitability, sales 

growth, market share, market performance, analyst expectations, consumer reputation/perception, etc. 

Just be sure to provide support for your position.

Select one company that you believe has been unsuccessful or exhibited poor performance using a management compensation plan. Again, success can be defined in a number of ways, and its entirely up to you 

how you define it as long as you provide scholarly support for your position.

Prepare a three to four-page paper addressing the following key elements:

• Brief overview of each company and why you selected them for your analysis.
• For the company that you have defined as successful, explain the companys structure or policies for management compensation and explain how it promotes a positive culture and aligns the goals of management with those of other stakeholders.
• For the company that you have defined as unsuccessful, explain the companys management compensation plans or policies and offer suggestions for improvement.