Exam 12: Compensating Executives

Using this executive compensation theory,shareholders negotiate the compensation contracts with the executive in hopes of aligning the executive's interests with theirs.

What is the term used when a company offers stock to its employees?

Shareholders' interests are represented by a ________ who weigh the pros and cons of top executives' decisions.

What does the IRS use the term "key employees" for?

The actions of executives on behalf of their own self-interest are known as the ________ problem.

Which of the following are the two main components of current core compensation?

The ________ Act of 2002 brought a number of reforms to enhance corporate responsibility,enhance financial disclosures,and combat accounting fraud due to fraud in companies such as Enron and Tyco.

An insurance company's board of directors decided to promise Katherine,one of their recently hired senior executives,to pay a bonus that is equal to the value of 10,000 company shares at the time she started to work.What type of compensation arrangement did the board of directors promise?

The recently appointed CEO of XYZ Inc.uses a luxury summerhouse owned by the company for rest and relaxation with his family as well as a place to invite important clients before a lucrative business deal.XYZ Inc.also provides a membership to an exclusive country club to its CEO.These kinds of benefits offered to CEOs are called

What is the advantage of compensation deferment until retirement for a CEO?

Briefly discuss the current core compensation and employee benefits of executive compensation.

This type of executive bonus is based on a bonus pool that is determined by a fixed-formula that is not determined by the executive's performance.

The concept that individuals evaluate their accomplishments by comparing themselves to similar individuals is based on ________ theory.

Who are the key players in setting executive compensation? Detail their different roles.How does SEC affect their roles?

This refers to the sale of stock by the stockholder.

Which executive bonus amount varies with the extent to which a pre-established minimum performance level is met?

Which type of stock options does not give executives favorable tax treatment?

A short-term incentive plan would most likely be used for which company employee?

XYZ Pharmaceuticals recently announced that the clinical trials for a cancer drug failed to cure the illness.This announcement led to a dramatic decrease in the stock value of the company.The company hired a new CEO two years ago when the clinical trials for this drug had already initiated.Which one of the following is true about the compensation of the CEO of XYZ Pharmaceuticals?

Restricted stock generally allows the executives ownership of the stock after how many years?