MGT Ch 13

In 2017, median compensation for directors at the largest U.S. corporations was around:

$300,000.

A corporation's shareholders have a right to inspect the company's books for any reason.

FALSE

Which of the following is a key feature of effective boards of directors?

Hold regular meetings without the CEO present.

Social investors seek to eliminate from their investment portfolios companies that:

Pollute the environment. Discriminate against employees. Make dangerous products like tobacco or weapons. (All of these answers are correct.)

A legal right of shareholders is:

To vote on members for the board of directors.

The audit committee is required by U.S. law to be

financially literate.

The Securities and Exchange Commission outlaws:

Any manipulative or deceptive device used to trade stocks.

The directors of a company are a central factor in corporate governance because they:

Exercise formal legal authority over company policy.

A reason for institutions becoming more assertive in promoting the interests of their member investors is:

Expressing dissatisfaction with management performance by selling a large block of stock would reduce the value of the institution's holdings.

Institutional investors have little incentive to hold their shares and organize to change management policy.

FALSE

It is illegal in the United States to offer stock trade tips to clients based on public information.

FALSE

The ratio of average executive to average worker pay tends to increase during recessions and fall during periods of economic expansion.

FALSE

The company justified Wynn's high compensation package, in the discussion case Executive Misconduct at Wynn Resorts, by saying that:

He had led the company to total returns of 19 percent per year between 2002 and 2017.

Supporters of declassifying board elections argue that this approach:

Increases accountability and responsiveness to shareholders.

One of the main reasons that American executives are paid so much is:

Pay is set by the compensation committees of the board, largely comprised of other CEOs who have an interest in pushing compensation up.

Reports filed with the SEC provide information on a company's:

Sales and earnings. Depreciation by line of business. Details of foreign operations. Ans :(All of these answers are correct.)

Shareholders have become an increasingly powerful and vocal stakeholder group in corporations.

TRUE

Since the 1960s, growth in the numbers of institutional investors in the United States has been phenomenal.

TRUE

When boards of directors meet without management present, they are more likely to have completely candid discussions about a company's affairs.

TRUE

Institutional investors are sometimes referred to as:

Wall Street investors.