This book compiles the existing knowledge of theories related to the compensation of top executives. It analyzes the current public debate on executive pay based on this broad knowledge. The first part of this book focuses on Performance Measurement Systems. Popular measures like market-based measures, accounting-based measures and non-financial measures as well as more holistic models are introduced. A special focus is put on goal setting theory and commonalities and differences of the various approaches to this concept are outlined. In the second part of this book, the link between goal setting theory and incentive compensation is established and general forms of compensation are explained. Both a general background on motivation as well as an introduction to incentives are provided. Then, an overview of popular incentive systems is given followed by general guidelines on when and how to employ incentives. Regulatory guidelines are briefly explained too. The final part of this book analyzes the current public discussion on top executive compensation. The book concludes with some managerial implications and suggested areas for further research.