Compensation Structures and Ethical Standards

Easy Cfa Institute Code And Standards Employer Duties - Compensation

As a charterholder working for an investment management firm, you are reviewing the compensation structure in your department. The firm offers performance bonuses based on the success of the funds managed. While designing these bonuses, it is essential to consider the CFA Institute Code of Ethics and Standards of Professional Conduct, particularly Section IV on Duties to Employers.

Which of the following statements regarding compensation and performance evaluation aligns best with the CFA Institute Code and Standards?

Compensation structures should prioritize individual achievement without regard for the overall performance of the firm.

Performance bonuses should be designed to encourage ethical behavior and align with the firm's long-term goals.

Investment professionals may accept bonuses based purely on short-term results to satisfy performance metrics.

Hint

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