An executive pay is any financial or non financial compensation or awards received by the firm executives for the services they have offered to organizations. These compensations include the salary, shares of stock, bonuses, perquisites, and benefits. According to some studies, executive compensations must always be aligned with the social goals of company such as public health goals. It is a very important part of the corporate governance, the processes that controls and directs the corporation.

There are six tools used for compensations. These are the short term incentives or the bonuses, salary, employee benefits, long term incentives, insurance, and paid expenses or the perquisites. Nowadays in most corporations, executive compensation Pacific Northwest of certain companies are being paid with a salary and as well as short term incentive which are the bonuses. The term for this is total cash compensation. Bonuses or short term incentives are coming from a given criteria which is based on the role of executives.

An executive may be compensated with a cash or with the shares of the company that are often being subjected to the restrictions of long term incentive. The consideration for it as part of the long term incentives is within 3 to 5 years. By this time, the recipient may be allowed to move the shares and to realize the value. A vesting restriction is based in time or in the performance.

Vesting may occur in two different ways. One is cliff vesting and the other is graded vesting. The cliff vesting occurs in one date while the other occurs over a period of time. There are also other packages that includes executive compensation in Boise, ID. These are the retirement plans, interest free loans in house purchasing, private jet and limousine, and health insurances.

Evaluation of the executive compensation is one difficult task an individual may encounter. But luckily, there are already available tools in which they can use for faster and easier processing. The tools will be analyzing and comparing the filings automatically which will give better result to the meaning of raw details.

The comparison of performance and pay is another popular way of evaluating. But unfortunately, many executives are still being paid with bonuses and raises though their companies are faltering. So in this comparison of performance and pay, overpaying can be determined. And this is determined through the prices of stock. When the stock price will outpace change of pay, they were not being overpaid.

The second popular way of evaluating is the peer comparison. By this process, executives are compared to the industry peers. For market leaders, their CEO will be paid more slightly than their industries. Most of the executives should be paid on par with their peers.

There are already a lot laws that are passed that would help in satisfying the concerns of investor over the compensation. There are also laws that are more direct when it comes to the practices of companies. One example for this is the removal of tax shelter which helped avoid millions in their taxes.

So it can be concluded that the consideration is important for the investors for decision making. If one executive is not compensated properly, the result is cost of money in the part of shareholders. And another thing is it will decrease the share price and the profit.