Incentive-Based Compensation Plans Should Offer Rewards to Management for Performance

question 81

True/False

Incentive-based compensation plans should offer rewards to management for performance that creates increased shareholder value to help avoid management's incentive to manipulate earnings per share.

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Definitions:

Libertarianism

A philosophical view that holds that individuals’ liberty is fundamentally important and that government must respect its citizens’ rights, understood as “negative” rights (that is, rights to act without interference so long as one’s actions do not interfere with the rights of others). Among the negative rights libertarians defend are the right to keep what one has or has earned, and the right to be free from government interference in all matters except when absolutely necessary to the general good.

Communitarian

Communitarian refers to a philosophical and social ideology emphasizing the importance of community and collective interests above individual rights.

Inequality

The state of not being equal, especially in status, rights, and opportunities, often focusing on issues related to social, economic, or political disparity.

Social-Contract Theorist

A philosopher who argues that the legitimacy of authority arises from an implicit agreement between the governed and the government.