Executive salaries and bonuses often make headlines here in the U.S., typically because they can be so high. However, it should be noted that executive compensation is often tied to performance or triggered by certain events.
For instance, the CEO of Snap Inc., the company that owns the popular social media app Snapchat, recently received a bonus amounting to roughly $800 million. The CEO led the move to take the company public, which happened last month. Thereafter, he received a bonus of more than 37 million shares. However, he also agreed to a substantial reduction of his yearly salary.
As noted on Investopedia.com, the CEO agreed to take home a salary of just $1 per year after the company went public. Other tech CEOs, like Facebook’s Mark Zuckerberg, made similar decisions when their companies went public. This should serve as a reminder that these compensation packages are typically much different, and more complex, than traditional employment compensation packages.
Not surprisingly, there is a lot at stake when it comes to these complicated and massive compensation packages. Everything from public image to corporate decisions can affect executive pay, so discussing compensation can be a volatile subject.
Should a dispute arise regarding executive salary, bonuses or other forms of compensation, it could create some negative publicity and unwanted attention for a company. Executive compensation can be a divisive topic, so resolving any disputes as peacefully as possible can be crucial. You may be able to do this during contract negotiations or through resolution methods like arbitration, which might keep the dispute out of the public eye.
If you have questions or concerns regarding compensation structure or terms, it would be wise to consult an employment law attorney. With legal support and guidance, you can protect yourself, your stake in a company and your financial interests.