Executive compensation is the financial compensation and benefits provided to top-level executives, such as CEOs, COOs, CFOs, and other high-ranking managers within a company. The purpose of executive compensation is to attract, retain, and motivate top talent to lead a company towards success.
Executive compensation includes a variety of components such as base salary, annual performance bonuses, stock options, restricted stock awards, retirement plans, and other perks such as a company car or an expense account. The compensation package is often determined by a combination of factors, including the size and profitability of the company, the executive's role and responsibilities, industry standards, and market competition for executive talent.
Executive compensation has been a controversial topic in recent years, particularly in relation to the income inequality debate. Some argue that excessive executive compensation can be a major contributor to income inequality, while others argue that the compensation is necessary to attract and retain the best talent for a company's top leadership positions. Many companies are under increasing pressure to provide greater transparency in their executive compensation policies and to demonstrate that executive pay is aligned with company performance and shareholder interests.
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