Question 3: Corporate Strategy and Performance Measurement & Rewards [15 marks]

StarTV is an Australian group of companies formed in December 2020 by the merger of Northern Media Group and Zero. The Group's parent company, Bull Media, is listed on the Australian Stock Exchange.

StarTVs television services cover most of regional Australia, with affiliation arrangements with all the metropolitan commercial networks.

They are currently reviewing their Remuneration and Incentive Plans and you have been engaged as an independent consultant to provide guidance to the board regarding how the plan should be structured.

Currently, all employees receive a base salary plus 9.5% superannuation. StarTVs CEO is proposing that they use one company-wide incentive plan that all employees and managers participate in. The plan is based on equal sharing of a bonus pool determined on the basis of 30 per cent of all profit earned over $3 million.

The CEO explains that the plan should be structured this way to encourage an organisational team view. The brief from the board is to develop an incentive plan in line with the companys strategy of revenue growth through high-quality television production and regional access, and align the interests of the executive team with the shareholders.

Required:

1. Prepare a report addressed to the CEO at StarTV detailing your proposed new incentive and remuneration plans for the three main tiers (groups) of employees (executive, middle management & operations) to motivate them to better meet the strategic goals of the organisation? Your report should include:

i. A discussion explaining to the CEO explaining the underlying principles that must be considered in drafting an incentive and remuneration package at StarTV. [5 marks]

ii. Identify potential goals for each group of employee aligned with the organisations strategy provided in the question. [5 marks]

iii. Provide a recommendation on the suggested incentive and remuneration structure and measures for each group of employees that aligns with the strategy of the organisation. [5 marks]