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X419 Risk Management.edited

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Running head: RISK MAANGEMENT 1 Risk Management Institutional Affiliation Date RISK MANAGEMENT 2 Subject: Compensating Executives An executive is a person or a group of people who run an organization and perform administrative roles in it. Compensation, on the other hand, is the process of paying an employee for example in terms of money and other benefits for the work they have done. Executive compensation as a whole is the combination of cash payments and non-monetary gains given to executives in an organization after they have done their management tasks (Maloa, 2018). Doing executive compensation, on one hand, is essential in ensuring that a company has good results since once an executive sees that their company values them, it becomes a motivating factor for them to really work hard. Also when an executive is given a performance incentive such as a vacation or a cash bonus, the executive remains committed to their work since their vision is so inspired (Maloa, 2018). On another side of the coin, executive compensation can be found excessive and may have quite some negative implications on the employer who is not in control of the life insurance policy and its benefits which are controlled by the executive. Secondly, since the life insurance policy is under the control of the executive, the employer may not cut down the bonus cost since they have to keep the executives motivated, which leads to losses to the employer (Obermann, 2018). Also, executive compensation p ...
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