Understanding Executive Compensation Structures

Easy Corporate Governance Executive Compensation

Executive compensation is a critical aspect of corporate governance and often reflects a company's philosophy towards aligning management's interests with those of its shareholders. In recent years, various compensation structures have come under scrutiny to ensure they promote performance and shareholder value.

Which of the following statements regarding executive compensation is most accurate?

Equity-based compensation primarily ties the executive's remuneration to the company's stock performance.

Cash bonuses are usually tied to long-term strategic goals rather than annual performance metrics.

Stock options are guaranteed and typically have no performance conditions attached.

Hint

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