When GE Offered Its CEO 250,000 Performance Share Units Tied

question 57

Multiple Choice

When GE offered its CEO 250,000 performance share units tied to performance targets achieved over five years,it was using which method of matching rewards to the accomplishment of strategic objectives?

• A) strategic-funds method
• B) segmentation method
• C) long-term evaluation method
• D) individual evaluation method
• E) weighted-factor method

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Definitions:

Homothetic Preferences

Consumer preferences that are consistent or proportionate across different scales or levels of consumption, indicating a straight line through the origin in a utility function graph.

Quasilinear Preferences

Preferences where utility is a linear function of one good, making the consumer's marginal rate of substitution between goods independent of the level of consumption of that good.

Convex Preferences

Consumer preferences where the consumer prefers averages or mixes of goods to extremes, represented graphically by convex indifference curves.

Monotonic Transformation

A monotonic transformation involves a function that either entirely increases or decreases, preserving the order of the original function’s elements.