A Recent Article Analyzing the Results from Over 100 Executive

question 25

Multiple Choice

A recent article analyzing the results from over 100 executive pay studies shows that the best predictor of executive pay, by far, is _____.

• A)firm size
• B)the number of insiders on the board of directors
• C)the industry in which the firm operates
• D)firm performance

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Definitions:

Value Creation

The process by which goods or services are provided that offer value to customers, thereby generating benefit to the producer or provider.

Comparative Advantage

a principle of economics that states a country or entity should produce goods and services for which it has a lower opportunity cost than its trade partners.

Specialization

involves focusing on a narrow range of products or services to gain efficiency and improve competitive advantage.

Exchange

The act of giving one item in return for another, often seen in finance and trade as the swapping of goods, services, or financial instruments.