Which of the Following Statements About the Components of Executive

question 77

Multiple Choice

Which of the following statements about the components of executive compensation is true?

• A) NYSE listing standards require that the compensation committee be composed of independent directors as well as the CEO.
• B) A compensation committee of expert consultants sets the pay of top corporate officers.
• C) The annual base salary is usually set near the median salary for leaders at comparable firms.
• D) Base salaries are often around $2 million,the amount that the IRS allows as tax deductible.

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Definitions:

Utilization

The measure of how efficiently resources, such as labor, equipment, and capacity, are being used in the production or service delivery process.

Break-even Point

The level of production or volume of sales at which total revenues equal total expenses, resulting in no net profit or loss.

Variable Cost

Costs that vary directly with the level of output or production, such as materials and labor.

EMV

Expected Monetary Value, a concept in decision making and risk management that calculates the average outcome when the future includes scenarios that may or may not happen.