When executive pay is based on company stock price, uncontrollable factors:
A) plays no role in executive compensation.
B) can play a limited role in executive compensation.
C) can play a large role in executive compensation.
D) determines executive compensation.

Question

Quizplus · Accepted Answer

When executive pay is based on company stock price, uncontrollable factors such as market conditions, global economic factors, and even natural disasters can play a significant role in executive compensation. These factors can affect the stock price of the company and ultimately impact the executive's compensation package. Therefore, these factors can play a large role in executive compensation.

When Executive Pay Is Based on Company Stock Price, Uncontrollable