From an Agency Theory Perspective,linking Executive Pay to Organization Performance

question 13

Multiple Choice

From an agency theory perspective,linking executive pay to organization performance may mean

• A)more emphasis on non-contingent pay and less emphasis on outcome-oriented contracts.
• B)less emphasis on non-contingent pay and more emphasis on outcome-oriented contracts.
• C)more emphasis short term compensation and less emphasis on long term compensation.
• D)more emphasis on base pay and less emphasis on stock performance.

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Definitions:

Drawings

Withdrawals of cash or other assets from a privately-owned business by the owner(s) for personal use.

Liabilities

Financial obligations or debts that a company owes to others, which must be settled over time through the transfer of economic benefits.

Debts And Obligations

Financial commitments or responsibilities, such as loans and promissory notes, that an entity is required to pay to others.

Future Economic Benefits

The capability to assist in the direct or indirect increase of cash and cash equivalents for an organization.