HR Comp & Benefit Chap 14
offers a solution for firms dealing with the salary plateau effect and attempts to accommodate the career intentions of senior scientists and engineers.
dual career ladder
A board of directors includes individuals from both inside and outside a firm who primarily _____.
give tactical advice on decision making
What is the consequence of companies providing liability insurance to safeguard directors from potential stockholder lawsuits?
Director compensation is reduced.
The association between scientist/engineer compensation and years of experience in the labor market is determined by
maturity curves
In the context of sales compensation plans, which of the following unit rate plans has one rate up to a target level and then a higher rate tied to more difficult "above-target" sales?
ramped commissions
Identify the fundamental components of most executive compensation packages. (Check all that apply.)
Long-term incentives Base salary Short-term bonuses Perquisites
Identify the concerns associated with using stock options as incentives. (Check all that apply.)
Stock options as incentives have the ability to manipulate the system. Stock options sometimes do not relate as closely as desired to executive performance.
The job of a supervisor is categorized as
exempt
In the context of controversial CEO pay practices, a "golden parachute" refers to _____.
the compensation given to a CEO when a merger or acquisition results in his or her termination
Identify the reasons for the current trend of companies hiring contingent workers. (Check all that apply.)
Companies desire to protect themselves in a volatile economy. The productivity of contingent workers is often higher than that of full-time workers. The wages and benefits for contingent workers are lower than those for full-time workers.
Which of the following is a characteristic of external directors?
They are not obliged to the CEO who appoints them.
In an attempt to understand the excesses in executive compensation, the integrates the political motivations that are an inevitable component of the corporate world.
agency theory
The views of a compensation committee play an important role in determining executive
base pay
suggests that CEOs are irresolute about stock options, inclined to be risky and to accumulate future wealth but also inclined to be cautious about preserving current wealth.
behavioral agency theory
According to social scientists, executive pay has a consistent corresponding relationship to _____.
compensation of lower-level employees
One of the economic perspectives to understanding executive compensation focuses on _____.
labor markets
Scientists and engineers are categorized as
professionals
Who among the following form a company's compensation committee?
A board of directors
Which of the following is an important facet of executive compensation that is primarily meant to drive better short-term performance?
Annual bonuses
True or false: A common trend in supervisory compensation focuses on an increased use of fixed pay.
False
Which of the following unit rate sales compensation plans recognizes that a sales person works as part of a team?
Pooled commissions
What are the controversial executive compensation practices identified by Institutional Shareholder Services (ISS)? (Check all that apply.)
Providing extraordinary perks or tax gross-ups Repricing of underwater stock options without the prior approval of shareholders
The major challenge in compensating supervisors centers on _____.
fairness in pay
In the context of the compensation of different groups in a company, an important characteristic of special groups is that _____.
the positions of the members of special groups are characterized by inherent conflicts
Which of the following statements is true of the Dodd-Frank Wall Street Reform and Consumer Protection Act?
It gives shareholders the power to vote for or against their organization's proposed compensation plan for its five highest-paid executives.
Which of the following is true of the stock options offered to executives?
They provide executives with an inherent incentive to aim for long-term achievements.
According to the economic approach to understanding executive compensation, the worth of CEOs, or their subordinates, must relate closely to _____.
some measure of company growth and profitability
Compiling data on salaries as a function of years since a scientist/engineer last received a degree is meant to _____.
determine the half-life of technical obsolescence
Identify the clauses under the Employee Retirement Income Security Act (ERISA) and the tax code that restrict an employer's ability to provide excessive benefits to executives. (Check all that apply.)
A benefit plan must cover a wide cross-section of employees. A benefit plan must satisfy certain vesting and nondiscrimination conditions. A benefit plan must provide determinable benefits.
Why do scientists and engineers experience lower salary increments in comparison to employees in other occupations after ten years in their career?
A slow obsolescence of their knowledge
Identify the types of sales compensation plans. (Check all that apply.)
Add-on plans Unit rate plans
In the context of sales compensation plans, which of the following unit rate plans has the same rate for each unit sold?
Flat commissions
Which of the following is true about executive benefits? (ERISA - the Employee Retirement Income Security Act)
Many executives receive additional benefits such as life insurance and exemptions from deductibles for health-related costs.
Which of the following is a strategy meant to draw workers into supervisory roles?
Raising the base pay of supervisors to some amount that surpasses the base pay of the highest-paid subordinate in the team
Identify the purposes of the Dodd-Frank Wall Street Reform and Consumer Protection Act. (Check all that apply.)
Safeguarding customers from abusive financial services practices Protecting taxpayers by putting an end to bailout
Which of the following is true of the compensation received by sales personnel?
The compensation received by sales staff is primarily based on incentives linked to individual performance.
Why are directors well-compensated?
They assume the risks associated with lawsuits.
In the context of the compensation of different groups in companies, which of the following is true of special groups in companies?
They tend to be strategically critical to the company.
True or false: A potential reason why companies are paying less bonuses to executives is that they want executives to shift their focus from long-term consequences to short-term consequences.
True
True or false: One way for companies to deal with equity problems that form a major compensation challenge for contingent workers is to promote the idea of boundaryless careers for them.
True
Who among the following covers the critical boundary between an organization and its consumers?
sales staff
According to the agency theory, executive compensation should be devised to ensure that executives keep in mind the interests of _____ when making decisions.
shareholders
The great majority of CEO pay is in the form of _____
short-term and long-term incentives
