The compensation for top executives at most firms consists of four components: short-term incentives,long-term incentives,executive benefits and perks,and base pay.

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Compensation for a company's top executives usually consists of four main elements. Base pay includes the person's fixed salary and bonuses. Short-term incentives are usually cash or stock bonuses for achieving short-term goals. Long-term incentives aim to encourage the executive to take actions that drive up the value of the company's stock and include things like stock options. Finally, executive benefits and perks include things such as supplemental executive retirement pension plans, supplemental life insurance, and health insurance without a deductible or coinsurance.

The Compensation for Top Executives at Most Firms Consists of Four