Executives Were Paid Based on Relative Performance

question 122

Multiple Choice

executives were paid based on relative performance:

• A)compensation would largely be based on luck.
• B)there would be less volatility in executive pay.(True Answer )Correct
• C)stockholders would find it more difficult to monitor how much the executives are being paid.
• D)executives would have less incentive to work hard since ability risk is now high.

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Definitions:

Excise Tax

A form of taxation applied on certain goods, services, or activities, often included in the price of products like gasoline, alcohol, and tobacco.

Incidence

The measurement or frequency of occurrence, often used in the context of the distribution of a tax burden.

Federal Tax System

The mechanism by which the United States government collects taxes from individuals and businesses to fund public services and infrastructure.

Progressive

In economics, refers to taxation or policies that proportionally take more from those who have more income or wealth.