Which of the Following Is True of an Executive Compensation

question 30

Multiple Choice

Which of the following is true of an executive compensation plan?

• A) The compensation paid to the executives should be linked only to the financial performance of the company.
• B) The executive compensations should be reported to credit rating agencies.
• C) It does not help balancing risk with short-run and long-run incentives.
• D) It includes benefits such as medical benefits, pension plans, and life insurance.

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including both raw materials and labor costs.

Operating Expenses

Expenses incurred during the normal operation of a business, not including the cost of goods sold.

Supplies Expense

The cost incurred from using supplies during an accounting period, recognized as an expense.

Net Income

The total profit of a business after all expenses and taxes have been subtracted from total revenue.