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Understanding executive compensation packages

On Behalf of | Jul 11, 2018 | Firm News

Getting to the executive level at your company is a great accomplishment. You have worked hard to get to where you are and there are benefits to your dedication. One of these is probably an increase in income and a new type of pay package.

If you are in an executive position, you may not realize what the differences in compensation are compared to hourly or salaried workers. It may surprise you that there are significant changes to the pay structure at the executive level and there are different components to your pay package.

Basis of pay

For salaried employees, pay is not generally dependent on company results. However, many executive-level pay is based on the performance of the company. If a company performs well and meets or exceeds its goals for the year, there may be substantial rewards in the form of pay.


Compensation packages for executives generally have a few different components. Some of these include:

  • Base salary – annual income
  • Performance based annual and long term incentives – compensation for achieving company’s goals
  • Benefits – such as social security, insurance, vacation days and retirement plans
  • Executive perquisites – “Perks” such as parking spaces, financial planning assistance or company assets for personal use

Determining executive compensation is typically different from other lower level positions and can be complicated to figure out. You want to make sure you are getting a fair deal for your work and are adequately paid.