A Criticism Against Executive Compensation in Recent Years Is That

question 80

Multiple Choice

A criticism against executive compensation in recent years is that:

• A) organizations are getting increasingly innovative in their incentive programs.
• B) executive compensation is based on the performance of each and every employee in an organization.
• C) there seems to be no relationship between organization's performance and executives' compensations.
• D) executives are earning a meager amount compared to the typical worker in an organization
• E) the gap between the earnings of a CEO and the earnings of a typical worker is significantly less.

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Definitions:

Dilution

A reduction in earnings per share or an increase in loss per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upon the satisfaction of specified conditions.

Business Combination

A transaction or event in which an acquirer gains control over one or more businesses, typically involving mergers, acquisitions, or consolidations.

Parent-subsidiary

The relationship between two corporations in which one corporation, the parent, owns sufficient voting stock in another corporation, the subsidiary, to control its board of directors.

Economic Entity

A unit in the economy that is capable of control over resources, incurring liabilities, and engaging in business activities.