Compensation committees justify large executive compensation packages for all of the following reasons except:
A) effective executives create shareholder value
B) good executive talent is in demand
C) the pay gap between the CEO and employees builds credibility
D) large incentive reward superior performance

Question

Quizplus · Accepted Answer

Compensation committees typically do not justify large executive compensation packages based on the pay gap between the CEO and employees building credibility. The other options are commonly used justifications for large executive compensation packages. Effective executives create shareholder value, good executive talent is in demand, and large incentives reward superior performance.

Compensation Committees Justify Large Executive Compensation Packages for All of the Following