When you choose to work in public or private sector companies, are there many factors to consider? Do you want to work with a company that only considers its own company factors or do you prefer to work for a company that provides employee compensation? These factors are considerably important. Based on empirical studies, one of the driving reasons for the private sector is that its compensation is based on the company's cash profits and tax avoidance rather than the value of executive compensation. In my report I support the findings of several researchers: (Tafkov, 2009), (Reda & Schmidt, 2014) and (Clausen, 1999). James Reda and David Schmidt researchers' findings based on severance considerations and the history of severance pay. The history of TFR dates back more than 60 years. According to James Reda and David Schmidt “it is very rare for CEOs to have agreements with their respective companies”. The second researcher is Paul Clausen, who analyzed the difference between executive compensation and company value. The value of a company is based on the remuneration of its activity. Whenever compensation is high, the lower the profits and accumulated assets associated with the value of the company. In this report the literature review will further illustrate the differences between the private and public sectors and the factor associated with each sector, the elements of executive compensation versus value. The gap in the literature is why employee compensation differs from executive compensation, determining reasonable executive compensation or enterprise value, and the determinant of executive compensation in private companies. The methodology report will show how relative performance information (RPI) on feedback from employee performance when the pay included...... halfway through the document is based on the performance of independent colleagues. (Tafkov, 2009) uses the RPI model in a team effort and performance approach. Works Cited Clausen, P. T. (1999). Executive compensation or company value. ACA News 42.3, 25-25.Gomez-Mejia, LM-K. (2003). The determinants of executive compensation in family-controlled public companies. Journal of the Academy of Management, 46, 226-237.Kvaal, E., & Langli, J.C. (2011). Determinants of executive compensation in private family firms. SSRN Working Paper Series.Masuda, B., & Barens, K. (2004). Innovative trends in private companies. Job Duration 47.9, 24-30.Reda, J. F., & Schmidt, D. M. (2014). Private company: liquidation considerations. (S. Reda, ed.) Financial manager 30.1, 55-60. Tafkov, I. (2009). Information on relative public and private performance under different incentive systems.