Research

The purpose and importance of executive compensation

Chapter 1: Introduction

February 6, 2018
Executive compensation guiding principles banner; aerial view of car driving through woods

The best approach to executive compensation is a principles-based approach. That’s the core premise of Willis Towers Watson’s Guiding Principles of Executive Compensation. The aim of this introductory chapter is to support that premise by highlighting the purpose and importance of executive compensation in the context of a broader argument: high-performing corporations are increasingly important to global society—beyond economic growth—and a strategic, principles-based approach to executive compensation helps to drive optimal business performance. That means creating an effective executive compensation system ultimately generates value for senior managers, their companies (including other employees), the economy, and society. To learn more, download the full chapter.