What is the significance of compensatory measures in executive plans?

The significance of compensatory measures in executive plans primarily pertains to recognizing incentive pay. These measures are designed to align the interests of executives with those of the shareholders and the overall company performance. By incorporating incentive pay into executive compensation packages, organizations can motivate executives to achieve specific performance goals, thus driving the company's success.

Incentive pay can take various forms, such as cash bonuses, stock options, or performance shares, all of which serve to reward executives for exceeding performance metrics or achieving strategic objectives. This structure encourages a results-driven approach, where compensation is closely linked to the value that executives bring to the organization.

The other choices may not accurately reflect the intent and design of compensatory measures in executive plans. For instance, discouraging high salaries goes against the purpose of attracting top talent; eliminating bonuses would counteract motivation efforts; and ensuring parity among employees generally pertains to broader employee compensation strategies rather than specifically addressing the unique design of executive compensation.