Executive Compensation

Executive compensation refers to the total reward provided by the firm to the top level of executives in a corporation, such as the chief executive officer (CEO), the chief operations officer, the chief financial officer, and a handful of other executives who occupy the very highest level of management. At this level in the firm, total compensation generally takes many forms, including any or all of the following: salaries, bonuses, incentive payments, deferred compensation plans, stock options, and the direct provision of goods and services. Unlike direct cash payments of salaries, bonuses, and the like, the other forms of compensation can be relatively large and less visible. For example, stock options granted to executives are not generally [Page 826]visible to the public, yet they may ...