Question

Which of the following is a problem surrounding executive compensation? Select one: a. Little or no relationship seems to exist between the performance of an organization and the compensation paid to its senior executives. b. Most senior executives are exempted from the perquisites provided by an organization to its employees. c. Executive compensation in the United States is far lower than that paid to senior executives in other countries. d. Executive compensation only involves incentive pay, which is based on the years of service in an organization and commission from the clients brought to it.

Answer 1

Answer:

a. Little or no relationship seems to exist between the performance of an organization and the compensation paid to its senior executives.

Explanation:

Executive compensation can be defined as remunerations, financial payments and non-financial benefits such as insurance, perks, allowance, incentives etc, which are specifically designed to be paid to top executives, business leaders or senior management employees working in an organization or business firm in line with shareholder value. It is also referred to as executive pay.

A problem surrounding executive compensation is that little or no relationship seems to exist between the performance of an organization and the compensation paid to its senior executives because this financial payment and benefits are predetermined or designed in anticipation of a positive growth and success of the business.