The ideal compensation plan would make all company contributions to the plan immediately tax-deductible and all tax consequences for managers:
A)Insignificant.
B)Deferred or avoidable.
C)Limited, but current.
D)Limited, but pre-paid.

Question

Quizplus · Accepted Answer

The best choice would be a compensation plan where tax consequences for managers are deferred or avoidable, as this would allow managers to maximize their take-home pay. If all company contributions to the plan were immediately tax-deductible, it would benefit the company rather than the individual managers. If tax consequences were limited but current, the managers may still end up paying a significant amount in taxes. If tax consequences were limited but pre-paid, it may not benefit the individual managers in the long run.

The Ideal Compensation Plan Would Make All Company Contributions to the Plan