Peter Drucker, the Management Expert, Has Argued That CEO Pay

question 44

Multiple Choice

Peter Drucker, the management expert, has argued that CEO pay should not be more than 20 times that of the rank-and-file employee. What did his concern focus on?

• A) the pay gap between CEOs and employees
• B) the perks that CEOs enjoy
• C) the need to raise the minimum wage for workers
• D) the relative basic education of executives versus the increasing sophistication of employees' knowledge

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Definitions:

Debt/Equity Ratio

A ratio demonstrating the comparative levels of shareholders' equity and borrowed funds deployed to finance company assets.

Residual Dividend Policy

A strategy where dividends paid to shareholders are based on earnings left over after all operational and project expenses are covered.

After-Tax Earnings

The amount of net income remaining after all taxes have been deducted, reflecting the company's profitability after fulfilling tax obligations.

Stock Split

A corporate action that increases the number of shares outstanding, reducing the price per share without changing the company's market capitalization.