The notion of compensation strategy originally surfaced in the
literature on executive compensation (Cooke, 1976, Ellig, 1981, Salter,
1973). From a strategic perspective, compensation for executives was
defined in terms of several basic elements: base pay, short- and longterm
incentives, benefits, and perquisites. The major strategic decisions
focused on the deployment of total compensation among the basic elements
to best achieve the missions of the organization. Long term incentives
as a percent of total compensation is an example. Attention was directed
at choices among various short-term versus long-term incentive schemes,
the relative emphasis on corporate versus subunit performance, and the
riskiness of the total compensation package.