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Executive Compensation

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Your Executives Expect Additional Options in Compensation

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Definition:

Compensation for executive managers is different from compensation for other employees in most organizations. Executive compensation covers employees that include company presidents, chief executive officers (CEOs), chief financial officers (CFOs), vice presidents, occasionally directors, and other upper-level managers. These high level employees are paid executive compensation.

Executive compensation is different from compensation for lower-level employees. The salary and other benefits are negotiated and are documented in a customized employment contract. The contract spells out compensation, benefits, perquisites, performance bonuses, separation and severance agreements, and other special terms of employment.

Executive compensation often includes:

The combination of salary, incentives, and bonuses is often referred to as Total Cash Compensation (TCC) for executives.

Executive compensation is negotiated between the potential executive and the employer. Where non-executive compensation is most often similar in characteristics among employees, executive compensation is negotiated and agreed to in an employment contract and may include substantial differences from the organizational norm.

The executive offer letter, in contrast with a lower level employee offer letter, is more detailed and contains a variety of options usually not available to other employees.

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Also Known As: pay, salary, comp, exec comp
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