Abstract
Internet companies are typically fledgling enterprises that have an abundance of marketplace potential but scant working capital. They are not known for their generous executive compensation packages, at least with regard to salaries and annual bonuses. In fact, such cash compensation can be significantly below that earned by senior managers at established industrial and service companies. For example, Amazon.com did not pay any employee more than $100,000 in its formative period, although it increased managers' cash compensation after going public. At Amazon.com, as in other Internet-related enterprises, expectations based on generous stock option awards play a key role in employee compensation. However, as Internet companies mature, compensation programs should be adjusted to the specific requirements of the startup, developmental and mature (usually following an IPO) stages of the organization. During this latter phase, market-level cash compensation may be a necessity to retain proven talent.
Get full access to this article
View all access options for this article.