The Problem with Tying Executive Pay to Stock Prices Is

question 76

Multiple Choice

The problem with tying executive pay to stock prices is that:

• A) many factors other than executive effort and ability affect stock prices.
• B) executives can manipulate stock prices.
• C) it is a complicated evaluation to make, riddled with strong assumptions.
• D) executives prefer more straightforward compensation schemes that reduce their risk.

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Definitions:

Dominant Responses

Refers to the most common or automatic actions people exhibit in performance situations, often enhanced by the presence of an audience.

Challenge Reaction

The response elicited when faced with a task or situation that is perceived as a test of one’s abilities or resources.

Threat Reaction

The emotional and behavioral response elicited when an individual perceives a threat to their security or well-being.

Social Image

The perception or view of an individual or entity by society, influenced by behavior, communication, and public actions.