Exam 11: Compensating Executives

A ________ stock plan is an arrangement whereby executives receive a bonus that is equivalent to either the value of company shares or the increase in that value over time.

Using this executive compensation theory,shareholders negotiate the compensation contracts with the executive in hopes of aligning the executive's interests with theirs.

When companies hire new CEOs from other companies,how do they compensate them?

These rights provide employees with an opportunity to purchase stock shares at a designated price or whenever the stock price increases,usually,within a specified period of time.

The XYZ Co.took back performance-based compensation of $1.2 million from their CEO because of his decision of the buyout of another firm that eventually lowered the overall value of the XYZ Co.Which of the following compensation agreements allowed the board of directors to take back this $1.2 million?

The actions of executives on behalf of their own self-interest are known as the ________ problem.

Which of the following is the difference between the stock price at the time of purchase and the lower stock price at the time an executive receives the stock option?

Which organization has as one of its main goals to help prospective investors understand the financial matters of importance to companies?

A provision of the ________ established the say-on-pay practice.

Company stock shares are the main form of executives' ________ compensation.

Which of the following is the term used when a company offers stock to its employees?

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?

For which reason does the IRS use the term "key employees"?

The ________ Act of 2002 brought a number of reforms to enhance corporate responsibility,enhance financial disclosures,and combat accounting fraud due to dishonesty in companies such as Enron and Tyco.

Describe golden parachute and platinum parachute practices.How are they similar to each other? How are these different from each other?

The concept that individuals evaluate their accomplishments by comparing themselves to similar individuals is based on ________ theory.

Which of the following describes CEO compensation that is deemed ineffective?

Who are the key players in setting executive compensation? Detail their different roles.How does the SEC affect their roles?

________ bonuses are awarded to executives by boards of directors on an elective basis.

________ provide pay and benefits to executives after a termination that results from a change in ownership or merger.