The compensation of executive officers, particularly chief executive officers (CEOs) and chief financial officers (CFOs), has become a critical issue in contemporary corporate governance. This essay examines the structure and implications of executive pay, which often comprises fixed salaries, performance-based incentives, share options, and other benefits. While high compensation is defended as a tool to attract top talent, drive innovation, and remain competitive in a global market, critics argue it leads to income inequality, misalignment with performance, and workplace demoralization. The paper explores both perspectives and emphasizes the growing public and institutional demand for regulatory interventions to ensure fairness, transparency, and sustainability. In doing so, it proposes actionable recommendations to reform executive remuneration systems, aligning them more closely with organizational performance and societal expectations.

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Executive Compensation in Corporate Governance: Striking a Balance Between Incentives, Equity, and Accountability

  • Dalal A. Alhajri,
  • Raed Alnimer

摘要

The compensation of executive officers, particularly chief executive officers (CEOs) and chief financial officers (CFOs), has become a critical issue in contemporary corporate governance. This essay examines the structure and implications of executive pay, which often comprises fixed salaries, performance-based incentives, share options, and other benefits. While high compensation is defended as a tool to attract top talent, drive innovation, and remain competitive in a global market, critics argue it leads to income inequality, misalignment with performance, and workplace demoralization. The paper explores both perspectives and emphasizes the growing public and institutional demand for regulatory interventions to ensure fairness, transparency, and sustainability. In doing so, it proposes actionable recommendations to reform executive remuneration systems, aligning them more closely with organizational performance and societal expectations.