To protect shareholders from excessive compensation practices, executive compensation packages are best set by:
A)The board of directors
B)A committee of primarily outside members of the board of directors
C)A committee of top management employees
D)The external auditors

Question

Quizplus · Accepted Answer

A committee of primarily outside members of the board of directors is best to set executive compensation packages as they can provide an objective evaluation of the executive's performance and ensure that the compensation is aligned with the company's long-term goals. A committee of top management employees might be biased towards executives' interests, while external auditors are not involved in setting compensation policies. The board of directors may not have the expertise or time required to set executive compensation packages.

To Protect Shareholders from Excessive Compensation Practices, Executive Compensation Packages