The company I have chosen to investigate for compensation ratios is Microsoft. The CEO of
the company is Satya Nadella, who has made $49,858,280 in total for compensation. This
amount exists from $2,500,000 received as salary pay, $14,212,500 in bonus pay,
$33,036,030 awarded as stock, $0 received in stock options, and $109,750 from other
compensation (Salary.com, 2018). For employees of Microsoft the average salary is about
$123,000 with an average bonus of about $14,000. The ratio of employee salary to CEO
salary is 21 to 1, which means the salary of 21 employees would be equal to the salary of the
individual CEO (Average Microsoft Corp Salary | PayScale, 2019). In my opinion I believe
that in most cases executive compensation is worth it because that singular person has more
obligations and duties than most employees and is in charge of the majority of the company.
c c c c
It is a good idea to compensate executives with stock or stock options because it gives the
company the chance to create shareholders with their own employees. This is beneficial for
the company because the executive will always do what's in the company's best interest to
make sure their share is doing well. The most useful auditing procedures to identify fraud
would be to learn and understand the company and its internal controls, perform any
analytical procedures needed, and analyse all financial statements (Auditing Standard No.
12).
References:
Auditing Standard No. 12. (n.d.). Default. https://pcaobus.org/oversight/standards/archived-
standards/pre-reorganized-auditing-standards-interpretations/details/Auditing_Standard_12
Average Microsoft Corp Salary | PayScale. (2019). Payscale.com.
https://www.payscale.com/research/US/Employer=Microsoft_Corp/Salary
Salary.com. (2018). Compensation Information for Satya Nadella , Chief Executive Officer
and Director of MICROSOFT CORP | Salary.com. Salary.com.
https://www1.salary.com/Satya-Nadella-Salary-Bonus-Stock-Options-for-MICROSOFT-
CORP.html
