When compensation committees base salaries and bonuses on median levels in a group of peer companies,they often choose larger peers.

Question

Quizplus · Accepted Answer

Compensation committees may choose larger peers as they believe their salaries and bonuses are more representative of industry norms and they can attract and retain high-performing executives. Additionally, smaller companies may not have sufficient data on executive compensation to provide accurate benchmarks.

When Compensation Committees Base Salaries and Bonuses on Median Levels