Exam 14: executive compensation and employee benefits

Which of the following involves a promise to pay a bonus in cash in the future based upon an amount equal to the value of a share of company stock.

Any ERISA plan fiduciary who breaches a duty is personally liable for the losses resulting from the breach.

What three fundamental beliefs to the Securities Act of 1933 and the Securities Exchange Act of 1934 reflect?

ERISA expressly requires that private pension plans use the ________ person investment standard.

By filing an election under Section 83(b)of the Internal Revenue Code within thirty days of exercising an option to purchase shares subject to a restricted plan

What do you believe should be done to provide health insurance in this country? What problems exist,and how should they be remedied? Discuss fully.

Which of the following is a principal requirement of an employee stock purchase plan?

Fact pattern 14-2 Jan is a participant in an employer sponsored disability insurance plan.Her former employer,Generous,provided the plan; and it was administered by ABC Insurance Co.Jan was initially awarded benefits a few years ago based upon a back problem.Her ex-husband,however,reported to the plan administrator that Jan was not really disabled and that she was engaged in the following activities with her new boyfriend: horseback riding,dancing the tango,scuba diving,and mountain climbing.After investigation,ABC promptly discontinued her disability benefits.Jan calls up the plan administrator and says that she is having significant back problems,that her ex-husband and ABC's private investigators are all liars,and that she is going to sue.Jan says that both Generous and ABC are biased and that all they want to do is save money,not take care of the disabled.Jan says that a federal court will straighten out the plan administrator's conflict of interest. -Refer to fact pattern 14-2.Which of the following will the court consider in determining whether a de novo or deferential standard of review is appropriate when reviewing the decision of the plan administrator?

The board of directors of A-1 Company sets vesting restrictions on stock options for executives.What do "vesting restrictions" mean?

Multiemployer pension plans are barred by ERISA.

An employee who receives stock in connection with a restricted stock plan is taxed at ordinary income tax rates to the extent that the stock value when received exceeds the amount paid.

Fact pattern 14-2 Jan is a participant in an employer sponsored disability insurance plan.Her former employer,Generous,provided the plan; and it was administered by ABC Insurance Co.Jan was initially awarded benefits a few years ago based upon a back problem.Her ex-husband,however,reported to the plan administrator that Jan was not really disabled and that she was engaged in the following activities with her new boyfriend: horseback riding,dancing the tango,scuba diving,and mountain climbing.After investigation,ABC promptly discontinued her disability benefits.Jan calls up the plan administrator and says that she is having significant back problems,that her ex-husband and ABC's private investigators are all liars,and that she is going to sue.Jan says that both Generous and ABC are biased and that all they want to do is save money,not take care of the disabled.Jan says that a federal court will straighten out the plan administrator's conflict of interest. -Refer to fact pattern 14-2.In making its decision,how would a court likely address Jan's claim of a conflict of interest?

Tony,the CEO,of a publicly traded company that sells exercise equipment has done a good job; and the price per share of the company's stock had increased at a rapid rate during the past year.Tony encourages the board of directors of the company to grant stock options to him.He requests,however,that the grant date for the options be set during the previous year so that he can purchase the stock at a cheaper rate.Which of the following is true regarding his request?

An employee stock purchase plan must provide that no employee can accrue the right at any time to purchase more than ________ of stock per calendar year,valued at the fair market value of such stock.

Many types of employee benefit plans are regulated by the federal Employee Retirement Income Security Act.

Which of the following is a federal law regulating pension plans and many types of employee benefit plans?

The U.S.courts of appeals are split on the issue of whether an ERISA fiduciary has an affirmative duty to disclose proposed changes in benefits in the absence of employee inquiries.

What does the 2004 rule of the Financial Accounting Standards Board require regarding the reporting of stock option awards?

ERISA does not

What is the meaning of the term "restricted stock" in the context of executive compensation?