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INTERACTIVE EXERCISE
We'll complete a case study, demonstrating how a compensation committee will evaluate competitive compensation packages using data and analysis from their various support groups.
The data source used in this exercise is from ERI's Executive Compensation Assessor (XA) tool.
Problem Statement
The Great Southern Life Insurance Co. is a regional company headquartered in Atlanta, Georgia. The company has assets of approximately $10 billion. Their CEO, Ronnie Tarbox, has held the position for 5 years. During that time, the company has shown growth in revenues comparable to most firms in the same industry. The compensation committee believes he should be compensated at the 65th percentile in the industry. His current base salary is $1,400,000 and his nonequity incentives for the year will be $1,200,000. His total cash compensation is $2,600,000. He was also granted equity compensation with a value of $2,500,000. This adds up to a total of $5,100,000.
Using ERI's XA tool, we will determine competitive cash compensation levels for CEOs at similar-sized organizations in this industry. Then we will look at what specific comparable companies have recently paid their executives in cash compensation and long-term incentives.
Instructions
Please press the Load Step-by-Step button to follow along with this analysis. You may wish to print out this Interactive Exercise PDF (which will open in a new window).
After you have completed the exercise, close the PDF window and select the Next button.
Note: You will need Adobe Acrobat Reader to view the PDF. If you don't already have it, select Instructions in the left-hand navigation of the course to find out how to download Adobe Acrobat Reader.