Reference no: EM133179889

Developing a Global Compensation Program at Colgate-Palmolive

Colgate-Palmolive is a $15.4 billion global company with operations in over 80 countries and 50 percent of its executives are US nationals stationed in other countries. They use global expatriates for many of their key management positions around the world. Because of this, Colgate-Palmolive has developed a global compensation program in order to attract and retain the best talent to help the firm achieve its vision of becoming "the best truly global consumer products company." Colgate benchmarks its salaries and benefits against the best in its industry and then tries to improve on them. 

Its global compensation plan consists of three parts: a base salary program that varies significantly from country to country; annual incentives that cover all key managers worldwide, based on sales and profit targets, adjusted for local conditions; and a long-term incentive plan for all global senior executives and managers, made up of global stock options and bonuses based on achievement of significant global business objectives. 

Colgate struggles with the willingness of employees to accept overseas assignments, even though it is clearly identified and communicated that such experience is an integral part of the career track for all employees. There are many reasons for the resistance, but this global compensation plan often provides the necessary response to those concerns. The firm has clearly found that the role of the expatriate has proven invaluable for the success of the company as a global player in the consumer products industry

1. What are the key differences in salary compensation for PCNs and TCNs? Do these differences matter?

2. What are the main points that MNEs must consider when deciding how to provide benefits?

3. Describe the main differences in the Going Rate and Balance Sheet approaches to international Compensation?