Which of the Following Statements Regarding CEO Compensation Is Accurate

question 42

Multiple Choice

Which of the following statements regarding CEO compensation is accurate?

• A) Differences in CEO cash compensation are very responsive to differences in firm performance.
• B) If a substantial percentage of a CEO's compensation comes in the form of stock and stock options in the firm, changes in compensation are closely linked with changes in firm performance.
• C) If a substantial percentage of a CEO's compensation comes in the form of stock and stock options in the firm, changes in compensation are not closely linked with changes in firm performance.
• D) If a substantial percentage of a CEO's compensation comes in the form of salary, changes in compensation can be expected to be closely linked with changes in firm performance.

---

Definitions:

Adam Smith

An 18th-century Scottish economist and philosopher, best known for his theories on free markets and the division of labor.

Financial Rewards

Monetary benefits given to employees or individuals as recognition for their work performance, achievements, or contributions.

Meaningfulness

The significance or value that work holds for an individual, often contributing to motivation and job satisfaction.

Heading

The title or caption of a section within a document, used to introduce or summarize its content.