Which of the following is true of an executive compensation plan?
A) The compensation paid to the executives should be linked only to the financial performance of the company.
B) The executive compensations should be reported to credit rating agencies.
C) It does not help balancing risk with short-run and long-run incentives.
D) It includes benefits such as medical benefits, pension plans, and life insurance.

Question

Quizplus · Accepted Answer

An executive compensation plan typically includes benefits such as medical benefits, pension plans, and life insurance in addition to salary and bonuses. The plan should also balance risk with short-run and long-run incentives and consider factors beyond just the financial performance of the company. The executive compensation may be reported to shareholders or regulatory agencies, but not credit rating agencies.

Which of the Following Is True of an Executive Compensation