Incentive Compensation is a remuneration regime that is aligned with the achievement of specific results or outcomes. The program is designed to encourage (incent) defined actions or outcomes by the participants in a specific timeframe with the expectations that those actions or outcomes create business value. Many incentive compensation programs involve both a base (salary) and variable (incentive) component, but some are entirely variable. The incentive compensation typically consists of commissions, bonuses of various types and/or profit sharing elements. It is used as a motivational tool used to drive and support business performance.