2010•The New Palgrave Dictionary of EconomicsRequires access

Executive Compensation

Michael L. Bognanno

Abstract

Chief executive officer (CEO) compensation is defined as the sum of base pay, bonuses, stock grants, stock options, other forms of compensation and benefits. Inflation-adjusted, median total CEO compensation in the United States almost tripled between 1992 and 2000, with grants of stock options evolving to be the largest component of compensation. This article presents the arguments for and against this level and composition of CEO compensation.

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Key concepts: Executive compensation, Chief executive officer, Stock options, Compensation (psychology), Stock (firearms), Business, Accounting, Economics