Which of the following statements about CEO compensation is accurate?
A) The ratio of CEO compensation to average nonmanagement employee compensation is about 20 to 1.
B) The average pay of the 200 highest paid CEOs approaches $1 billion.
C) Unlike employee and lower management compensation, CEO compensation is rarely tied to performance.
D) According to the text, CEOs work on average fewer hours and at a less frenetic pace than most nonmanagement employees.

Question

Quizplus · Accepted Answer

The ratio of CEO compensation to average nonmanagement employee compensation has significantly increased over the years, often cited in studies and reports. While the exact ratio can vary by company and over time, it is not uncommon to see ratios much higher than 20 to 1, reflecting the growing disparity between executive and non-executive pay. However, options B, C, and D contain inaccuracies: CEO pay does not approach $1 billion on average, CEO compensation is often closely tied to performance (through bonuses, stock options, etc.), and there is no general consensus that CEOs work fewer hours or at a less intense pace than nonmanagement employees.

Which of the Following Statements About CEO Compensation Is Accurate