Compensation at Level 3 Communications Harvard Case Solution & Analysis

Unique Compensation Plan Level 3 managers rewarded for performance of the company only if the company's stock price movement greater than the market. This project was designed to maximize shareholder value by linking more closely the performance of the manager that the company, not tying it to the level of the overall market. Last year was difficult for the telecommunications sector, and the third level, as well as many other companies have been concerned about both retention and adequately compensate them. In addition, Level 3 to hire a significant number of employees over the next year, and the company's compensation plan will play a significant role in attracting good employees. At the annual meeting of the compensation committee is approaching, the director shall review whether the plan was successful, and the changes were justified. Possible changes include a change in its benchmark index of the S & P 500 on the other (possibly more specialized) index, and adjusting the size of the indexed option grants and cash option / mix to get the right incentives in light of the fall in stock prices. "Hide
by Lisa Meulbroek Source: Harvard Business School 12 pages. Publication Date: December 11, 2001. Prod. #: 202084-PDF-ENG

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