Which of the following ideas is at the heart of most executive compensation plans?
A)Executives are more focused on their base compensation than they are on the variable pay.
B)Executive compensation should be focused on the organization's current performance in the stock market.
C)Executives should be rewarded if the organization grows in profitability and value over a period of years.
D)Executives view status and image as important as compensation.

Question

Quizplus · Accepted Answer

The idea that executives should be rewarded if the organization grows in profitability and value over a period of years is at the heart of most executive compensation plans, as it aligns the interests of executives with the long-term success of the company. Base compensation is only one part of the overall compensation package, and variable pay (such as bonuses and stock options) is often used to incentivize performance. While stock market performance may be a consideration, it is not the only factor, as companies may prioritize other goals such as innovation or sustainability. Status and image may be important to some executives, but they are not typically the primary focus of compensation plans.

Which of the Following Ideas Is at the Heart of Most