Compensation committees justify large executive compensation packages in the following ways 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

The pay gap between the CEO and employees does not build credibility, but rather can lead to resentment and a decrease in employee morale. The other options are commonly used justifications for large executive compensation packages.

Compensation Committees Justify Large Executive Compensation Packages in the Following