What does annual compensation include?

Annual compensation encompasses various components that contribute to an employee's total earnings over a year. To break it down, annual compensation typically includes the base salary, which is the fixed amount of money paid to an employee for their work. Additionally, it often comprises bonuses, which are extra payments given based on performance or company profitability. Benefits such as health insurance, retirement plans, and paid time off also form a significant part of annual compensation. Other elements might include stock options, commissions, and any other financial rewards or perks provided by the employer. In summary, annual compensation is a comprehensive package that includes not just the base salary but also bonuses, benefits, stock options, commissions, and other financial rewards. This holistic approach ensures that employees are fairly compensated for their contributions to the company.