Defining the Strategic Context for the Executive Compensation Plan Define the strategic context for the executive compensation program, including the internal and external issues that lace the company and its business objectives-boosting sales abroad,downsizing,and so on. Based on your strategic aims,shape each component of the executive compensation package(base salary,short-term incentives,long-term incentives,and benefits and perquisites),and then group the components into a balanced whole. Create a stock option plan to give the executive compensation package the special character it needs to meet the unique needs of the executives and the company. Check the executive compensation plan for compliance with all legal and regulatory requirements and for tax effectiveness. Install a process for reviewing and evaluating the executive compensation plan whenever a major business change occurs. 4Defining the Strategic Context for the Executive Compensation Plan Define the strategic context for the executive compensation program, including the internal and external issues that lace the company and its business objectives—boosting sales abroad, downsizing, and so on. Based on your strategic aims, shape each component of the executive compensation package (base salary, short-term incentives, long-term incentives, and benefits and perquisites), and then group the components into a balanced whole. Create a stock option plan to give the executive compensation package the special character it needs to meet the unique needs of the executives and the company. Check the executive compensation plan for compliance with all legal and regulatory requirements and for tax effectiveness. Install a process for reviewing and evaluating the executive compensation plan whenever a major business change occurs. 4