Many workers in Texas, and elsewhere, are paid hourly wages, while others receive annual salaries. As an executive, however, your compensation may be structured differently. In order to make sure you are paid fairly, it is important for you to understand common executive compensation options. If you are not compensated appropriately, it could result in a contract dispute.
Often, executives such as yourself are paid a base salary. An annual figure, this may be paid bi-weekly or monthly, much like typical salaried workers. In general, this pay is not contingent on any other factors. Therefore, it is income that you can count on. According to a CNBC report, 37 percent of the income executives earned in 2014 was cash, or base pay.
In addition to your base pay, you may also receive incentives or bonuses. Such earnings are generally used to compensate you for achieving your company’s short and long-term business strategies. Thus, it is generally based on you accomplishing certain goals that are set by your superiors.
Like other employees, you may also receive certain benefits as part of your compensation package. This may include general benefits, such as workers’ compensation, Social Security, life insurance, medical insurance and severance pay. As an executive, however, you may be entitled to benefits that salaried employees do not receive. In some cases, you may be offered the ability to participate in special retirement plans, like supplemental employee retirement plans.
As an executive, you may also receive compensation in the form of perquisites, which are not typically available to other salaried workers. This may include stock options, discounted stocks or the right to purchase restricted stock. CNBC reports that 54 percent of CEO pay in 2014 was in the form of stock and stock options. In addition, your company may offer other perks, such as a driver, the use of company planes, financial planning or security. These benefits may be structured to recognize your value to the company, and the extraordinary demands that your job places on your time.
This post has provided an overview of common options for executive compensation packages. You should keep in mind, however, that not every situation is the same. As such, your employer may not offer all of these possibilities. Therefore, you should consider this only as general information, and not take it as legal advice.