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What Are the Primary Factors Involved in Determining Compensation for a Firm's

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Essay

What are the primary factors involved in determining compensation for a firm's CEO? What reasons best explain compensation reductions for top executives in recent years?


Definitions:

Employee Effectiveness

Refers to how efficiently and effectively an employee performs their job duties, contributing to organizational goals.

Individual Power

The capacity or ability of a single person to influence others or change outcomes in a desired way.

Legitimate Power

Power derived from a person’s position or job in an organization.

Organizational Role

The set of responsibilities, activities, and expectations associated with a specific position within an organization.

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