The compensation committee at Robix needs to justify its large executive compensation packages. They might use all of the following arguments EXCEPT
A)effective executives create shareholder value.
B)good executive talent is in great demand.
C)the pay gap between the CEO and employees builds credibility.
D)large incentives reward superior performance.

Question

Quizplus · Accepted Answer

This argument (the pay gap between the CEO and employees builds credibility) does not support the notion of justifying large executive compensation packages. In fact, many argue that a large pay gap can damage company culture and decrease employee morale. The other three arguments can all be used to justify large executive compensation packages.

The Compensation Committee at Robix Needs to Justify Its Large