blog

Tackling Compensation

by Lauren

Alex Rodriguez made $29 million last year (and will make around that in each of the 10 years of his contract). Is he worth that much money? His current performance certainly makes it hard to justify. Determining appropriate compensation levels though is a long-term process that must account for many factors, including demonstrated and expected performance.

kasina is currently conducting a study on compensation, specifically for the e-Business team. Baseball and financial services are two different industries, but general managers (whether they are for the Yankees or for a fund company e-Business team) face similar issues in determining compensation:

• What is an appropriate and fair salary?
  
• How can future performance affect total compensation?
  
• How should the location and stature of the team affect compensation?
  

As we continue our research, a few factors are emerging as important:

• Variable pay can be a smart way to compensate high-performing employees and account for gaps in base salary
  
• Experience, both experience within the industry and experience specific to the position, can significantly affect salaries
  
• Company size, performance, emphasis on e-Business, and to some extent, company location, can also significantly impact total compensation packages
  

For more information about our study or to participate, visit our Web site or e-mail me at llisher@kasina.com. For more information on how to get a $252 million, 10-year contract, please contact Scott Boras, agent for Alex Rodriguez.