Section FourCASE 4-2 continued
statements as a charge to earnings.^11 Without such a
requirement, stock option grants to executives, which may
eventually take on millions of dollars in value, are never
reflected in financial statements.
Questions
- Explain the potential adverse impacts on strategy
implementation when the CEOs of companies receive
extremely high compensation. - Discuss the merits of the various recommendations for
solutions to the problem of extremely high CEO
compensation. - What nonregulatory pressures are most likely to bring
excessively high CEO salaries more in line with realistic
levels? - Evaluate the argument that pay for performance
justifies the level of compensation paid to the CEOs
noted in the examples. - Evaluate the argument that the problem of excessive
CEO compensation should not be addressed through
legislation.