If Executives Were Paid Based on Relative Performance

question 195

Multiple Choice

If executives were paid based on relative performance:

• A) compensation would largely be based on luck.
• B) there would be less volatility in executive pay.
• C) stockholders would find it more difficult to monitor how much the executives are being paid.
• D) executives would have less incentive to work hard since ability risk is now high.

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Definitions:

Mathematical Abilities

Mathematical abilities refer to the capacity to perform and understand various mathematical concepts, operations, and problem-solving techniques.

Verbal Skills

The ability to communicate effectively using language, including speaking, listening, reading, and writing.

Aggressive

Characterized by behavior intended to harm or intimidate others, either physically or verbally.

Alzheimer's Disease

A progressive neurological disorder that causes brain cells to waste away and die, leading to a continuous decline in thinking, behavioral, and social skills.