When a firm ties an executive's bonus payouts to long-term performance of the firm rather than to annual performance of the firm, it is instituting long-term ________ plans.
A) incentive
B) financial
C) performance
D) competency

Question

Quizplus · Accepted Answer

Long-term bonus plans tied to the performance of the firm over several years are an example of incentive plans. These plans are designed to motivate executives to make decisions that will benefit the company in the long term, rather than focusing solely on short-term gains. Financial plans, performance plans, and competency plans may also be used by companies, but these do not specifically refer to long-term incentives.

When a Firm Ties an Executive's Bonus Payouts to Long-Term