A company using competency-based pay compensates employees for ...

[asd123]

A company using competency-based pay compensates employees for all of the following EXCEPT ________.
 
  A) behaviors
  B) job title
  C) knowledge
  D) skills

Question 2

What are the primary factors involved in determining compensation for a firm's CEO? What reasons best explain compensation reductions for top executives in recent years?
 
  What will be an ideal response?

[dlook33]

Answer to Question 1

Answer: B

Answer to Question 2

Answer: For a CEO position, job evaluation typically has little relevance. One recent study concluded that three main factors: job complexity (span of control, the number of functional divisions over which the executive has direct responsibility, and management level), the employer's ability to pay (total profit and rate of return), and the executive's human capital (educational level, field of study, work experience) accounted for about two-thirds of executive compensation variance. There are various reasons why boards are clamping down on executive pay. The Dodd-Frank law of 2010 requires American companies give shareholders a say on pay. Law firms are filing class-action suits demanding information from companies about their senior executives' pay decisions. As of 2007, the Securities and Exchange Commission (SEC) required filing more compensation-related information, including a detailed listing of all individual perks or benefits if they total more than 100,000. As of 2005, the Financial Accounting Standards Board required that most public companies recognize as an expense the fair value of the stock options they grant. The Sarbanes-Oxley Act makes executives personally liable, under certain conditions, for corporate financial oversight lapses.