Executive compensation as a corporate governance issue and factors determining executive compensation

Abstract

Executive Compensation refers to the monetary and non-monetary benefits provided to executives as a form of payment or recognition for their completed work. The topic of Executive Compensation is regarded as intricate and contentious, garnering the interest of numerous groups for additional investigation. This research employs a qualitative methodology, specifically utilizing a literature review. The findings of this study indicate that the primary objective of carefully crafted Executive Compensation is to effectively attract, retain, and incentivize top-level management while also addressing issues related to agency conflicts. Nevertheless, these incentives have the opposite effect, leading to the financial collapse of major corporations and giving rise to issues in corporate governance as executives exploit them for their own personal gain.