The Importance of Compensation from Different Aspects: A Study of Akamai Inc.

In today’s society, more and more companies are focusing on how to maximize the benefits of their company using compensation concepts. This paper examines the importance of compensation by analyzing Akamai Technologies’ executive compensation changes from 2015 to 2021 and comparing Akamai to Meta and draws three important conclusions. First, pay for performance as part of the compensation plan addresses agency issues and motivates employees to work hard, while the presence of base pay provides an incentive for employees to be reluctant to work. In addition, the company's compensation philosophy protects the interests of both employees and the company. It aligns the interests of shareholders and employees, attracts competent people, maintains fairness in the workplace, and regulates the behavior of employees. Finally, the paper discusses that compensation in ways other than money is also an important factor of attracting talent. It is more stimulating for employees to be rewarded according to the benefits each individual needs than to be rewarded with money only.