Compensation management is a set of activities aimed at researching, designing, implementing and maintaining stimulating compensation schemes for employees for their work and loyalty to the company. Compensations are the total benefits that employees receive for their work in the company. The company's employee rewarding strategies are divided into the strategies of material and strategy of intangible reward. Management compensation strategy is the way that the company attracts, rewards and retains its managers. From the point of view of the structure or performance on the basis of which the compensation is paid there are different compensations, like compensations for the work performed, compensation from the profit share, compensation based on company affiliation and managerial compensation. The manager’s compensation package is consisted of fixed and variable elements: basic salaries as a fixed element and short and long term bonuses, capital plans, severance packages, pension and life insurance programs and special programs of special benefits as variable elements. The research carried out for the purpose of this paper has shown that the compensations of top managers in the private sector companies are considerably larger than compensations od top managers in the public sector companies in the Republic of Croatia. It has also shown that the managers' compensation packages in the private sector are more complicated than the compensation packages of top managers employed in public sector companies. To improve business operations in the public sector high-quality remuneration policies for top managers should be developed in line with the business results achieved and that would attract and retain top managers in public sector companies.