Bauer Business Focus

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Steve Werner | November 19, 2010

Published on November 15, 2010

The economic downturn has made companies get creative in how they reward employees, says Steve Werner, a management professor at the University of Houston C. T. Bauer College of Business.

On Bauer Business Focus – A conversation on employee pay trends from the factory floor to the executive suite with Ed Mayberry, business reporter for KUHF 88.7 FM.

For many, raises have been hard to come by during the recession. Employers are looking for new ways to motivate staffers and hold on to the valuable ones.

“In the last couple years more than half of the companies have had a freeze in pay,” says Steve Werner, a management professor at the University of Houston C. T. Bauer College of Business. “Companies have tried to offset that with perks like flextime or more benefits that don’t cost a lot of money.”

CEOs are still living in a different economic universe, but it’s not been as bright a place for these stars.

“Executive compensation packages have changed,” Werner adds. “In the recession we’ve seen a lot of outrage over it. A lot of a CEOs pay is in stock options. The stock market has not done well so that’s gone down.”

When markets rally, the value of executive stock options also rise. New laws will tell more about what executives are earning compared to everyone else. There have also been changes designed to make board members setting CEO salaries more independent, but Werner says he doesn’t see government going further and imposing pay caps.

“There is talk of setting maximum pay for executives — people say no one is worth $200 million in a year. I don’t think that will ever come to fruition because people don’t like government involved that much in the market.”

Click here for the full interview.

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