In the past,the compensation of chief executive officers of corporations usually was based on:
A)a generally accepted principle that CEOs should earn no more than 40 times the compensation of the company's lowest paid employee.
B)the size of the company.
C)their company's profits and/or increases in the value of their firm's stock.
D)the assumption that CEOs should be major stockholders of the corporations that they managed.

Question

Quizplus · Accepted Answer

In the past, the compensation of chief executive officers of corporations was mostly based on their company's profits and/or increases in the value of their firm's stock. This was seen as a measure of the CEO's performance and ability to generate profits and enhance the value of the company. Other factors, such as size and ownership, may have also played a role, but profit and stock value were the primary drivers of CEO compensation. The idea of limiting CEO compensation based on the lowest paid employee's salary or requiring CEOs to be major stockholders was not as prevalent in the past.

In the Past,the Compensation of Chief Executive Officers of Corporations