An insurance company's board of directors decided to promise Katherine,one of their recently hired senior executives,to pay a bonus that is equal to the value of 10,000 company shares at the time she started to work.What type of compensation arrangement did the board of directors promise?

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The compensation arrangement promised by the board of directors is Phantom Stock, where the bonus promised to Katherine is equal to the value of 10,000 company shares, but she doesn't actually own any stock in the company. Phantom stock is a synthetic equity-based compensation plan where employees receive a bonus based on the performance of the company's stock without actually receiving any equity.

An Insurance Company's Board of Directors Decided to Promise Katherine,one