Structuring the international compensation program: Equitable pay for overseas executives

Abstract

Policies and procedures in the field o f international compensation-for expatriates, nationals, or third-country nationals-are not clearly defined in most companies with interests abroad. The authors' observations on this subject are most pertinent to those companies that rotate their executives through domestic and foreign assignments. They have found, for example, that expatriates generally receive too many extras. Their primary recommendation is that compensation programs for domestic, expatriate, and foreign national managers should not be allowed to function separately, but should bear a well-defined relationship to each other. They feel that the trend today is toward true executive mobility despite national origin in large multinational firms and that compensation practices should be modified in order to accommodate this trend and not work against it.