Exam 35: Shareholders

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Kalina is the CEO of Northfield Corporation.Who sets her compensation,and what types of compensation would she likely receive in addition to her salary? Can shareholders do anything to challenge her level of compensation if they think it is unfairly high in comparison to average employee compensation within the company?

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Question 1

Correct Answer:

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The board of directors sets the level of executive compensation,and it is rarely linked closely to individual performance.It is common for executives to receive not only a salary,but also such things as stock options; termination payments upon death or even firing; retirement plans; death benefits; and perks such as country club memberships,cars,and possibly even a company jet.In 2005,compensation for the top 100 CEOs in the United States was 475 times as much as compensation for the average worker.There is little shareholders can do to challenge Kalina's compensation.To win,shareholders must prove that the board of directors violated the business judgment rule either by making a compensation decision that was grossly uninformed or by setting an amount so high it had no relationship to the value of the services Kalina performed.

Under SEC rules,companies:

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Question 2

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In a derivative lawsuit,the named plaintiff:

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Question 3

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There is a trend for boards of directors to be made up of more independent directors who are less likely to simply go along with whatever the CEO wants.

(True/False)

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Question 4

Before filing a derivative lawsuit,shareholders must:

(Multiple Choice)

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Question 5

A proxy is a vote that is mailed in,like an absentee ballot.

(True/False)

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Question 6

Lucy owns 10 shares of stock in Quamba,Inc.Lucy wishes to place a proposal in a company's proxy statement to be voted on at the shareholders' meeting.Pursuant to the SEC rules,before Lucy is allowed to place her proposal on the proxy statement she must:

(Multiple Choice)

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Question 7

Controlling shareholders have no fiduciary responsibility to minority shareholders.

(True/False)

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Question 8

In reality,the officers of the large corporations have a great deal of influence on who will be nominated and elected as directors.

(True/False)

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Question 9

Loraine is a shareholder of Taley Corp.She would like to inspect and copy the company's minute book,accounting records,and shareholder lists.Under what circumstances is Loraine allowed to inspect or copy corporate records?

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Question 10

Jan is a controlling shareholder in E-treme,Inc.Under the law,controlling shareholders must include minority shareholders in any favorable arrangements that they make for their own stock.

(True/False)

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Question 11

If directors serve on the boards of multiple corporations,the executives of those corporations are less likely to be overpaid.

(True/False)

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Question 12

Unless the form provides for a longer period,a proxy is valid for how long under the Model Act?

(Multiple Choice)

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Question 13

Which of the following is correct concerning the SEC regulations on shareholder resolutions?

(Multiple Choice)

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Question 14

Discuss how the Sarbanes-Oxley Act affects Haletronne Co.,a publicly traded corporation.

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Question 15

Meredith,a shareholder in Quarto,Inc.,notified Quarto's board of directors that the corporation had been wronged and asked the board to bring a lawsuit in the corporation's name.In response to Meredith's demand,the board:

(Multiple Choice)

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Question 16

Larry has owned $5,000 of stock in E-prise,Inc.for the past 18 months.Under SEC rules,Larry can require that one proposal be placed in the company's proxy statement to be voted on at the shareholder meeting.

(True/False)

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Question 17

Luella just purchased 5 shares of common stock in TriColor,Inc.for $250.Luella has the right to:

(Multiple Choice)

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Question 18

A derivative lawsuit is filed by the directors on behalf of the corporation against third parties who have committed wrongful acts and/or breaches of contract.

(True/False)

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Question 19

A shareholder proxy is generally revocable at any time.

(True/False)

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Question 20

Showing 1 - 20 of 45

Exam 35: Shareholders

Under SEC rules,companies:

In a derivative lawsuit,the named plaintiff:

There is a trend for boards of directors to be made up of more independent directors who are less likely to simply go along with whatever the CEO wants.

Before filing a derivative lawsuit,shareholders must:

A proxy is a vote that is mailed in,like an absentee ballot.

Lucy owns 10 shares of stock in Quamba,Inc.Lucy wishes to place a proposal in a company's proxy statement to be voted on at the shareholders' meeting.Pursuant to the SEC rules,before Lucy is allowed to place her proposal on the proxy statement she must:

Controlling shareholders have no fiduciary responsibility to minority shareholders.

In reality,the officers of the large corporations have a great deal of influence on who will be nominated and elected as directors.

Loraine is a shareholder of Taley Corp.She would like to inspect and copy the company's minute book,accounting records,and shareholder lists.Under what circumstances is Loraine allowed to inspect or copy corporate records?

Jan is a controlling shareholder in E-treme,Inc.Under the law,controlling shareholders must include minority shareholders in any favorable arrangements that they make for their own stock.

If directors serve on the boards of multiple corporations,the executives of those corporations are less likely to be overpaid.

Unless the form provides for a longer period,a proxy is valid for how long under the Model Act?

Which of the following is correct concerning the SEC regulations on shareholder resolutions?

Discuss how the Sarbanes-Oxley Act affects Haletronne Co.,a publicly traded corporation.

Meredith,a shareholder in Quarto,Inc.,notified Quarto's board of directors that the corporation had been wronged and asked the board to bring a lawsuit in the corporation's name.In response to Meredith's demand,the board:

Larry has owned $5,000 of stock in E-prise,Inc.for the past 18 months.Under SEC rules,Larry can require that one proposal be placed in the company's proxy statement to be voted on at the shareholder meeting.

Luella just purchased 5 shares of common stock in TriColor,Inc.for $250.Luella has the right to:

A derivative lawsuit is filed by the directors on behalf of the corporation against third parties who have committed wrongful acts and/or breaches of contract.

A shareholder proxy is generally revocable at any time.

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