Compensation is defined as something, typically money, received by an individual in exchange for their services. In business, Compensation is the payment an employee receives from an employer in lieu of work performed for them. Consultants and contractors are also entitled to compensation, meaning the individual will be paid for the product or service they provide. A broader compensation definition includes monies owed as a recompense to an injured or otherwise wronged party by the party responsible.
Compensation has monetary and non-monetary components including but not limited to salary or wages, stock options, stock grants, commission, perks, and bonuses.
Compensation or a part of it is usually tied to performance.