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Executive compensation (also, director remuneration) is how top executives of business corporations are paid. This includes a basic salary, bonuses, shares, options and other company benefits for work on the board of directors. Over the past three decades, director remuneration has risen dramatically beyond the rising levels of an average worker's wage.

The board of directors is the controlling organ of the company, so responsibility for the levels of pay for all company employees is ultimately theirs. Pay is just one element in the wide range of spending and resource allocation decisions by the heads of firms. Others include investment decisions, which suppliers to use, which business partners to contract with, how to distribute capital and dividends to shareholders, and so on. While various committees, or "human resource" departments will usually be delegated the task of setting pay levels, a particular problem arises for executive compensation. When responsibility for executive compensation levels is ultimately the executives', there could be, what management scientists call, significant agency costs.

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