Five Perks Commonly Included in Executive Compensation Packages

Posted: January 26, 2021

While lofty executive salaries are often what make headlines, it can be surprising to hear that base salaries usually only make up a small portion of an executive’s total compensation package. In order to lure in top talent, companies will go above and beyond to provide perks, or perquisites, to a top executive in addition to a high salary. This article will take a look at the 5 best perks that are commonly included in executive compensation packages.

Stock options

When you look at some of America’s wealthiest CEOs, it can be surprising to see that their base salaries are actually quite low, when compared to their total net worth. If they are only making $2 million in salary, how are they worth $10 million? The difference usually consists of stock options. Stock options can be included in executive compensation packages from the start and are also added in as performance-based bonuses or incentives.

Travel budgets

Lots of executives have to travel extensively for their job in order to meet with clients or visit other office locations. Additionally, depending on the size of the company and how high-profile the executive is, travel is also a matter of security. Someone like Mark Zuckerberg from Facebook would most definitely get harassed if he flew with a commercial airline. Luckily for executives, this can mean flying around in a corporate jet, using a personal chauffeur, and getting other things such as hotel rooms or meals paid for out of a corporate expense budget.

Lofty pensions

Being top management is not only nice while you are working, but it’s also nice for the post-retirement years. This is because, to attract talent, most companies will promise to take care of executives after they depart by way of retirement benefits and pensions. This is mostly done to build goodwill with top executives and also to encourage them to stay with the company long-term. If an executive knows that they have a lucrative pension coming then they will be discouraged to chase other opportunities. Former Boeing CEO, James McNerney Jr. is a great example of an executive who left his company with a retirement package worth $19.9 million.

A corner office

Although luxury office spaces are a declining trend these days and are more associated with elite hedge fund managers of the 1980’s, top-level executives can still expect to be taken care of when it comes to their workspaces. As an example, It is much easier to get work done when you have a beautiful view of downtown Manhattan than when you are staring at 4 walls of a cubicle.

Country club fees

This is another long-standing perk that is dwindling in popularity. However, some companies will still foot the bill for social and leisurely activities such as joining an expensive country club. This is commonly included in executive compensation packages because mingling with fellow executives can help build business relationships, and entertaining clients can often offer the foundation for a healthy business relationship between companies.

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