NFL Owners Weigh Contract Extension for Roger Goodell
Garcia, Ahiza and Dylan Byers
CNN.com
Posted 11/13/2017
Key words and Definitions
Skill based pay system – a compensation model that rewards employees for skills and competencies they possess.
Variable pay systems – a compensation model that rewards employees based on performance or output.
Performance management system – a method of evaluating performance where you establish standards and then compare employees to those standards.
Summary: Key Points of the Article
NFL Commissioner Roger Goodell is currently negotiating his contract extension. Goodell is willing to give up most of his contract guarantees in exchange for performance incentives. These contract negotiations are occurring during a time of league upheaval related to player protests and falling television ratings. Goodell’s leadership and handling of several issues has been criticized by fans and owners alike.
Goodell’s deal is under consideration by a compensation committee comprised of six team owners. He has reportedly requested a $49.5 million annual salary, lifetime use of a private jet, and lifetime health insurance for his family. For comparison, Goodell made $31.7 million in 2015. Goodell was paid more than $205 million over the period from 2008 and 2015 when salary records were public information.
News Topic
#6 Social Responsibility
Exercise 1 Multiple Choice Questions
- Firms often use executive stock options as a way to provide managers with incentive to make decisions that will increase stock price. Executive stock options are an example of;
a. variable pay
b. fixed pay
c. compensation metrics
d. none of these
Answer: Since this pay is tied to a performance metric it is a variable pay component. - Which of these factors may be a determinant of pay?
a. skill sets
b. length of employment
c. certifications possessed
d. all of these
Answer: All of these are possible determinants of pay. - The process used to focus a person’s efforts towards achieving a goal or performing a task is known as;
a. motivation
b. focus
c. compensation
d. none of these
Answer: The process used to focus a person’s efforts towards achieving a goal or performing a task is known as motivation. Compensation can be a motivator and focus can refer to channeling efforts in the appropriate direction.
Exercise 2 Critical Thinking Questions
- What type of pay system does the NFL currently use for Roger Goodell?
Answer: It appears that much of his current pay is guaranteed and not tied to performance metrics. Instead his pay is based on his knowledge of the NFL and his ability to perform the duties associated with the job of NFL Commissioner. It appears the NFL pays him using a skill based pay model. - What type of pay system does Roger Goodell want the NFL to use in the future?
Answer: Goodell apparently wants a pay system that is tied to performance metrics. This type of system is called a variable pay system since his pay could vary significantly from one year to the next depending on whether he achieves the specific goals established by the NFL. - What are some possible performance metrics the NFL may use in a variable pay system?
Answer: I suspect it will use television viewership, licensing agreements, and any other revenue generation metric that Goodell is responsible for negotiating for the league.
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