What is Executive Compensation
You may think that compensation is the same at any level, with just the salary amount changing. However, executive compensation skews more towards rewarding results rather than just paying more to the staff member. Executive-level employees have more responsibilities and accountability in their roles. So, if the company doesn’t do as well as expected, executives will often get paid far less than what they could if the company had flourished in that year.
This helps to motivate the executive team towards a common goal; the company’s success. It causes them to have much higher stakes in the company achieving its desired outcomes.