Page 582 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

568 The Complete Guide to Executive Compensation

Possible Compensation Possible Compensation
Next Year Two Years from Now
Rating Salary Incentive Total % Increase Rating Salary Incentive Total % Increase
5 $438.8 $280.0 $718.8 25.0% 5 $452.4 $307.2 $759.6 5.7%
4 452.4 254.5 706.9 1.7%
3 452.4 206.2 658.6 8.4%
2 452.4 153.6 606.0 15.7%
1 438.8 100.9 539.7 24.9%
4 $438.8 $232.0.8 $670.8 16.7% 5 $452.4 $307.2 $759.6 13.2%
4 452.4 254.5 706.9 5.4%
3 452.4 206.2 658.6 1.8%
2 452.4 153.6 606.0 9.7%
1 438.8 100.9 539.7 19.5%
3 $430.1 $188.0 $618.1 7.5% 5 $452.4 $301.1 $753.5 21.9%
4 452.4 249.5 701.9 13.5%
3 452.4 202.2 654.6 5.9%
2 448.6 150.5 599.1 3.1%
1 431.0 98.9 530.0 14.3%

2 $419.3 $140.0 $559.3 2.7% 5 $452.4 $293.5 $745.9 33.4%
4 452.4 243.5 695.6 24.4%
3 449.9 197.1 646.9 15.7%
2 438.7 146.8 585.4 4.7%
1 423.7 96.4 520.1 7.0%

1 $406.3 $92.0 $498.3 13.3% 5 $452.4 $284.4 $736.8 47.9%
4 449.0 235.6 684.6 37.4%
3 437.8 191.0 628.7 26.2%
2 426.6 142.2 568.8 14.2%
1 414.5 93.4 508.0 2.0%

Rating definitions: 5, Outstanding; 4, Superior; 3, Good; 2, Satisfactory; 1, Marginal
Table 9-25. Possible future salary and annual incentive payout

A long-term plan reflecting various performance levels for the following year might be
presented in the manner illustrated in Table 9-26.
The Effect of a Pay Increase on Employee Benefits. Communicating a salary increase is
rather simple and straightforward: the individual is told he or she received an increase of $X,
or Y percent, effective Z date. Companies stopping here lose a great opportunity to show the
multiplied effect of a salary increase, namely, the flow-through to increased benefit coverage.
Table 9-27 shows a worksheet for the Brucell Company. For illustration purposes, a 40-year-
old receiving a $1,000 annual increase is shown. Space is provided for the person to fill in his