Executive compensation Guide, Meaning , Facts, Information and Description
Executive Compensation is how top executives of business corporations are paid. Salary is taxable to an individual at a high individual rate. If part of that income can be converted to capital gain, for example by granting stock options to executives, a more advantageous tax treatment may be obtained.In a typical modern US corporation, the CEO and other top executives are paid with a mixture of cash and shares of the company (which could immediately be sold and redeemed for its value in cash). For example a highly paid CEO would get 1 million cash, and 10 million in shares of the company.
Other components of an executive compensation package may include such perks as generous retirement plans, a chauffered limosine, an executive jet, interest free loans for the purchase of housing, etc.
There are many contraversies in the field of executive compensation:
Many people believe CEO's are paid too much. Others counter that this is necessary to retain the best talent. This argument however is countered by those who say that true price competition does not occour at the CEO level, because their pay is set by the board of directors-a group usually almost tottaly composed of CEO's of other companies (see http://www.theyrule.net ). Charges that CEO's are paid too much