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Compensation and Incentives

The document outlines the compensation and incentives for an employee. It states that the employee will be paid the minimum wage of 320 pesos per day based on regional wage orders. The compensation will be reviewed annually based on performance. In addition to base compensation, the employee is entitled to performance incentives including annual raises based on ratings, cash bonuses, group health benefits paid partially by the employer, and participation in an employer-sponsored retirement savings plan with employer matching contributions that vest over time.

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Luis Washington
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114 views2 pages

Compensation and Incentives

The document outlines the compensation and incentives for an employee. It states that the employee will be paid the minimum wage of 320 pesos per day based on regional wage orders. The compensation will be reviewed annually based on performance. In addition to base compensation, the employee is entitled to performance incentives including annual raises based on ratings, cash bonuses, group health benefits paid partially by the employer, and participation in an employer-sponsored retirement savings plan with employer matching contributions that vest over time.

Uploaded by

Luis Washington
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Compensation and Incentives

For all services to be rendered by the Employee pursuant to the willingness to enter into
this Agreement and employment with the Company upon the conditions and terms herein set
forth; and in part of the consideration for the other obligations and promises of the Employee as
set forth in this Agreement, the Company will compensate the Employee at the minimum wage
income of 320 pesos per day based on the Minimum Wage Rates in Baguio City upon the
Regional Tripartite Wages And Productivity Board of the Cordillera Administrative Region,
WAGE ORDER NO. RB-CAR-19 ”Prescribing The New Minimum Wage Rates Of Private
Sector Workers In The Cordillera Administrative Region” with it being intended that such Base
Compensation shall be reviewed annually hereafter, with the changes in Base Compensation to
be determined by the President in his sole discretion from time to time based on the performance
of the Employee and the results of the Company. The Base Compensation shall be paid to the
Employee in equal installments and shall be subject to applicable income tax withholding
deductions required by law and other deductions authorized by the Employee. The Employee
will be entitled to reasonable vacation and sick leave in accordance with Company policy.

In addition, to his/her Base Compensation, the Employee will be entitled to the following
performance incentives during the time he is employed by the Company:

1. Raises, Bonuses and Incentives


Employees will receive annual raises based on performance ranking and ratings.
For example, an outstanding performance appraisal could result in a 5 percent salary
increase. Sample employee bonus and incentive plans include cash incentives based on a
percentage of the employee's gross salary or an employee's share based on a discretionary
pool of funds designated for distribution to employees whose performance contributed to
business success.
2. Group Health Benefits
A total compensation plan may include group health-care benefits. The employers
pay a sizeable portion of the total monthly income, leaving a portion of the income to be
deducted from the employee’s pay. Premiums for employer-sponsored health care plans
are deducted from pre-tax income, which are gross earnings. Coverage may include
supplemental coverage for dental, medical care and vision care as well. Also pay the total
cost for short-term disability insurance and offer coverage for long-term disability
insurance as part of an employee’s total compensation.
3. Retirement Savings Plans
A sample compensation scenario gives employees the opportunity to participate in
the employer-sponsored 500k plan. Employees designate pre-tax contributions to be
deducted from each monthly paycheck. For employees who contribute 5 percent of their
gross salary or wages, the company matches 50 percent of the employee’s contribution.
In other words, the employer’s matching contributions equal 2.5 percent of the
employee’s gross salary. Vesting periods range anywhere from one to eight years. An
eight-year vesting period means that for the first year after the employer makes its
contribution to the employee’s 500k plan, 20 percent of the money actually belongs to the
employee. In the second year, 40 percent belongs to the employee, and in subsequent
years, 60, 80 and 100 percent of the employer’s contributions become vested and
available to the employee. If the employee leaves his job before completing eight years,
he forfeits the appropriate portion of the non-vested employer’s contributions.

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