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We rate each company's performance and pay alignment based on: (1) whether the CEO's performance-adjusted compensation (PACTM) has been reasonable for the size, industry, and performance of the company, and (2) whether the CEO's Performance-Adjusted Compensation has been appropriately sensitive to performance.
Thus the salary of the typical LBO business-unit manager is almost 20 times more sensitive to performance than that of the typical public-company manager.
In other words, the greater threat of a takeover prompted boards of directors to be more sensitive to performance measures in making CEO firing decisions.
If pay is not sufficiently sensitive to performance, it means that the company pays regardless of performance.
If pay is too sensitive to performance, it means the company is encouraging significant risk taking on the part of the executive.
On the other hand, fixed thresholds set to low values are less sensitive to performance degradation under low load or high mobility; however, under high load, they are more consistent with actual link qualities and thus give rise to a low number of route recoveries, which leads to good performance.
Similar(47)
Metacognitive efficiency indexes the extent to which one's confidence judgments are sensitive to objective performance.
It is found that the spigot size is very sensitive to the performance.
The market for family houses is astonishingly sensitive to the performance of local schools and good state education is free only if housing costs are excluded.
For one thing, more senior executives rode to work on Metro-North than the Jamaica-based L.I.R.R., making them more sensitive to its performance.
"If we're heading to full-value restricted stock grants, we may be going to a worse place than we were with options, because those grants may be less sensitive to actual performance".
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com