Reference no: EM131400222

The CEO of your company sits on several other Boards, as is the practice in the industry. The CEO is going to annual meeting where one of the agenda items is to vote on the compensation package of the CEO and CFO of Genetics, LLC, another company in the industry. The Board of Genetics has hired a consultant who is recommending a 20% increase in the base salary of the CEO and CFO as well as an aggressive set of stock options which, if the sales of the company increase, will nudge the salary package into seven figures. From your research you know that the current salaries of the Genetics CEO and CFO are already at the top of the scale. Genetic’s preliminary annual report indicates that they are about to launch a major new product which is in the last stages of review by the FDA. You also know that Genetics tends to be a bellwether for salaries for CEO’s in your industry.

The CEO of Genetics sits on your board and will be voting on your compensation package which comes up in two months at your annual meeting. You have hired the same consulting firm to do the compensation survey. You expect a similar report from the consulting firm. Thus, you will be positioned to ask for a significant raise and would expect reciprocity from your colleague.

Be Reasonable: Explore the Options

1. Motive

Choose three options to analyze. You will analyze multiple options to help ensure that you choose a reasonable option to implement.

After brainstorming with the leadership team, you have identified four options:

1. Vote for the increase in salary with the expectation of a similar courtesy when your salary package comes up.

2. Do not vote for the increase in salary.

3. Before the meeting, consult with the CEO and indicate that you are concerned about the sharp increase in the compensation package. Indicate that you will not be voting for the salary package.

4. Do market research and only raise the salary if based on performance.

In this step, identify your reason for acting -- your motive. Explain your reason for implementing these options.

2. Universalizability

Now consider whether everyone could adopt this reason for acting without our social structure falling apart. This step invites us to think about universal principles that cross all cultures and communities.

3. Reversibility

Next -- think about whether you would be willing to have someone use the reasons you just wrote for how they were going to treat you. Explain why you would be willing to accept these reasons.

4. Prior Agreements

Next, consider whether you are treating the stakeholders the way they have agreed to be treated List your stakeholders and your agreements and explain why you believe that through these options you are treating them fairly.

5. General Expectations

Finally, consider whether these options meet the general expectations in the community. Explain specifically how these options show that you are being responsible.