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) Most compensation plans are two parts: salary and health plan
C) It does not help balancing risk with short-run and long-run incentives.
D) It includes salary, annual incentive compensation, and benefits such as medical benefits, pension plans, and life insurance.

Question

Quizplus · Accepted Answer

An executive compensation plan typically includes salary, annual incentive compensation, and benefits such as medical benefits, pension plans, and life insurance. It is important to provide a balance of short-run and long-run incentives to align the executives' interests with those of the company. Financial performance is one factor considered, but not the only one, when determining executive compensation.

Which of the Following Is True of an Executive Compensation