Executive compensation, also known as executive pay, refers to remuneration packages specifically designed for business leaders, senior management and executive-level employees of a company
Executive compensation definition
Executive compensation, also known as executive pay, refers to remuneration packages specifically designed for business leaders, senior management and executive-level employees of a company.
Executive compensation includes benefits such as salaries, perks, incentives, insurances etc.
Importance of executive compensation
Senior management and executive-level employees play a crucial role in the company as they're the ones making the strategies, taking importance decisions etc. In order to keep them motivated and satisfied it's important to set the right benefits package.
This type of compensation is negotiable between the employer and potential executive and can defy the organizational norms on compensation to regular employees.
Components of executive compensation
2. Short Term Incentives (STI)
3. Long Term Incentives (LTI)
4. Guaranteed Severance Package
5. Perquisites – like club memberships, private planes
6. Insurance – health insurance for self and dependents
Explore More Terms & Definitions
- Personality tests – psychometric testing
- Outbound Hiring
- Talent Pool
- Business continuity planning
- Learning Style
- Direct Hire
- Human Resource Outsourcing (HRO)
- Supplemental Unemployment Benefits (SUB)
- General Agent
- Cognitive Ability Testing
- Employee Value Proposition (EVP)
- Exit Interview
- Business Casual Attire
- Probationary Arrangement
3 Ways Technology Can Make HR Teams More Productive
7 Steps to Build a Social Media Recruitment Strategy
11 Similarities Between Recruiters and Marketers
[GUIDE] How to Successfully Hire for a Startup