Why Do Critics Argue That High Compensation for Boards of Directors

question 48

Multiple Choice

Why do critics argue that high compensation for boards of directors is a bad thing?

• A)It is too expensive for the organization.
• B)It could cause conflicts of interest between the directors and the organization.
• C)It is not fair to poorly compensated employees.
• D)High pay will render the board less complacent.
• E)Board of director compensation is negatively related to corporate growth.

Recognize the importance of empathy and social intelligence in effective relationship management.

Understand the importance of self-management and integrity in professional development.

Understand the basic concept of Gross Domestic Product (GDP) and its components.

Comprehend the difference between nominal GDP (GDP) and real GDP.

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Definitions:

Minimum Required Rate

The lowest rate of return or discount rate that investors are willing to accept before investing in a project or financial asset.

Investment Opportunity

Any vehicle or asset that individuals or businesses can put money into in hopes of generating a financial return.

Return On Investment

A financial ratio used to evaluate the effectiveness of an investment, comparing the gain from the investment to its cost.

Minimum Required Rate

The lowest acceptable rate of return on an investment, used in capital budgeting and decision-making.