14. Why might it make sense to change a CEO’s incentive pay plan as the CEO near

Question

14. Why might it make sense to change a CEO’s incentive pay plan as the CEO nears retirement?

a. There should be increased emphasis on annual performance plans since a CEO nearing retirement has a shorted management horizon.

b. There should be increased emphasis on long-term performance plans in order to encourage the CEO nearing retirement to act in the best long-term interests of the shareholders.

c. There should be a change in the nature of the performance plans to reduce the short-term, self-interested, focus of the CEO nearing retirement.

d. The CEO nearing retirement should be given increased discretion over accruals and deferrals.

Explanation / Answer

C. There should be a change in the nature of the performance plans to reduce the short-term, self-interested, focus of the CEO nearing retirement.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.