Executive compensation is the monetary and non-monetary benefits which are given to the senior management & executives of a company. Executive compensation includes salaries, perks, incentives, insurances etc. This includes high salaries for executive, insurances, company shares & other benefits.
Senior management plays a pivotal role in building the company’s business and brand. Thus, organizations look take care of these employees by giving them special compensation and benefits. Their salaries & compensation is based not only on their experience but also on their profile, qualification etc.
Importance of executive compensation
It is an important aspect of business and HRM. Senior employees are the ones making the strategies, taking importance decisions etc. Thus, it is extremely important to keep the senior management motivated. The Executive compensation is negotiable between the employer and potential executive. It can defy the organizational norms on compensation to regular employees. Executive compensation is offered to the chairman, CEOs, board of directors etc.
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