AI Week 14 YUM DB 153 Essay Example | Topics and Well Written Essays - 250 words

AI Week 14 YUM DB 153 - Essay Example The Yum CEO’s pay drops to 10 million, which is a 22% decrease. This indicates how the overall revenue may be a determinant when calculating the total pay of executives. CEO is directly liable when a company underperform. Considering the model used to calculate the pay of the CEO, it is evident that a CEO is motivated to perform once a pay cut is registered on the overall salary package. Each company formulates its payment model based on the stock performance however Giorgi and Chemi (2014)indicates the model being a myth as many companies shows that there is no correlation between the company stock performance to the payment packages. They attribute only 1% of highly paid CEO to be based on stock performances. In conclusion, the compensation policies vary depending on the firm’s priority. The article shows how stock performance determines the compensation package of a CEO. The model works to ensure the company’s top chief works towards ensuring the overall performance of the company is stable and overcome external factors. Chemi, E., Giorgi, A. (2014, July 22). The Pay- for- Performance Myth. Business week. Retrieved