Asked by Morgan Young on May 28, 2024
Verified
What is the most important factor driving executive compensation?
A) firm size
B) firm performance
C) fraud
D) political connections on boards
Executive Compensation
The package of pay and benefits awarded to senior executives, including salaries, bonuses, stock options, and other perks.
Firm Performance
Measures how well a company achieves its business objectives and financial goals.
Political Connections
Relationships or affiliations between organizations or individuals and political figures or institutions, which may influence the organization's outcomes.
- Understand the factors driving executive compensation and its relation to firm size, performance, fraud, and political connections.
Verified Answer
ZK
Zybrea KnightJun 02, 2024
Final Answer :
A
Explanation :
Firm size is the most important factor driving executive compensation. Larger firms tend to pay their executives more due to the complexity, scope of responsibility, and the market demand for experienced executives capable of managing large organizations.
Learning Objectives
- Understand the factors driving executive compensation and its relation to firm size, performance, fraud, and political connections.