In theory,the CEO hires the consultant to perform an objective analysis of the company's executive pay package and to make whatever recommendations the consultant feels are appropriate;however,in practice,which tends to be the case?
A)Shareholders' interests are often placed secondary to the interests of the CEO.
B)This relationship generally leads to a compensation package that is higher than expected.
C)This relationship generally leads to a compensation package that is lower than expected.
D)This relationship has the potential to promote a conflict of interest.

Question

Quizplus · Accepted Answer

In practice, the relationship between the CEO and consultant has the potential to promote a conflict of interest, as the CEO may have a vested interest in maintaining or increasing their own compensation package. This can make it difficult for the consultant to provide an objective analysis and make appropriate recommendations.

In Theory,the CEO Hires the Consultant to Perform an Objective