To retain top employees, compensation packages have to be meaningful to the employee while not giving away the farm.

Chief executives of Fortune 500 companies receiving lavish pay, including significant stock options and other forms of deferred compensation, have become commonplace.

But now, with the U.S. labor market tighter than it has been in years, these incentives are being considered more frequently at middle-market companies and smaller firms across America trying to attract key staff by matching incentives at larger, public companies.

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