Compensation Plan Outline Assignment Example | Topics and Well Written Essays - 1500 words

Compensation Plan Outline - Assignment Example Equity awards are more preferred in the bank and are given after several years of deferring compensation. In determining appropriate levels of compensation, the bank management considers several factors including the performance of an individual, the business unit in which they work, and the bank as a whole in a given period; and short term and long term financial and non financial related factors. Before any compensation can be given, the company contracts evaluators who present reports to the management. These evaluation report â€Å"Compensation Plan Outline† helps the company to assess the performance at individual levels especially on issues of compliance to banking standards and in making decisions which do not put the company into avoidable risks. Those employees and shareholder who make critical decisions that save the company from taking unnecessary risks and ensure that the bank does not face penalties due to non compliance to laws, are highly compensated. This there fore encourages bank associates and shareholders to be well informed on appropriate legal banking procedures at bank level and nationally. The bank has put in place various measures to ensure that all compensation is fair and just based on its banking principles. The bank’s management has a separate unit of compensation and benefits committee, and there are also various control points at business level like risk, audit, and compliance checks to ensure any decision made on behalf of the bank is well noted and reported in the context of its compliance. to risk and performance standards accepted nationally and locally at the bank. The presence of these various units in the bank management ensures that there is independence in the functions of each section or committee. This is especially important in determining which compensation consultant is engaged to carry out auditing and evaluation exercises on bank functions and performance. The corporate nature of the bank as it is in major corporations nationally and globally makes evaluation of compensation more diverse in order to incorporate interests of all stakeholders including legislators. In as much as compensation in the bank of America should be in line with what the financial industry has agreed upon, the bank has its own internal measures with which any compensation amount must be adjusted in order to reflect the value the company attaches to performance standards. The bank conducts audit and evaluations at most yearly so as to give stakeholders an opportunity to give ideas on how they expect the bank to compensate its associates, workers and shareholders. These audit and evaluations are based on general set standards at national level by authorities who regulate the financial industry. The bank’s pay for performance philosophy is indeed appropriate and it is in good spirit so that workers who deserve compensation are motivated as their efforts are r ecognized. This makes the bank employees to be disciplined and work under their own supervision taking measures which are appropriate and can earn rewards for themselves and profits for