Use the Information Below to Answer the Following Questions

question 110

Multiple Choice

Use the information below to answer the following questions.
Fact 10.3.1 Executive Pay
Executive compensation, based on performance, can theoretically constrain pay, but companies are paying their top executives more and more. The median compensation of a CEO in 2013 was $13.9 million, up 9 percent from 2012
Source: CNBC, April 28, 2014
-Refer to Fact 10.3.1. CEO compensation schemes are designed to solve

• A)the principal-agent problem.
• B)the problem of CEOs without long-term labour contracts.
• C)the problem of slow and expansive decision-making in a complex management structure.
• D)the problem that many CEOs lose all of their wealth if the corporation goes bankrupt.
• E)the problem of the CEO being taxed twice-once on salary income and once on dividend income.

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Definitions:

Distinct Stages

Separate and clearly differentiated phases within a process or life cycle.

Life Course

An approach in sociology and psychology that studies individuals and their trajectories through life, focusing on social, psychological, and biological aspects of life from birth to death.

Rehabilitation

Rehabilitation involves curing disabilities to the extent possible through medical and technological intervention; trying to improve the lives of the disabled by means of care, training, and education; and integrating the disabled into “normal” society.

Disabled

People who are incapable of performing within the range of “normal” human activity.