What is Executive Compensation ?
‘Executive Compensation’ refers to the compensation packages paid to the top executives of a company such as the CEO, CFO, CTO, etc for their services. It differs a lot in structure and amount compared to the compensation provided to the other employees.
For example, executive compensation often includes the shares of the company as a part of the benefits package. This not only helps in motivating the employee to work harder to increase the stock prices, but also helps them save taxes on their income.
Executive compensation has grown exponentially in recent years and it has led to criticisms from various parties involved. The compensation difference might be demotivational for the lower-level employees and hence it has been a point of controversy in the past.