Determining executive compensation involves several factors:
1. Market Benchmarking: Companies often compare their compensation packages with those of similar organizations in the industry. 2. Company Performance: The overall performance of the company plays a significant role in setting compensation levels. 3. Individual Performance: Executives' personal achievements and contributions to the company are also considered. 4. Board of Directors: The board, often with the help of a compensation committee, decides on the final compensation packages. 5. Regulatory Guidelines: Compliance with regulatory frameworks and guidelines is mandatory.