Question 3

(Word limit: 500 words)

Executive compensation has very little to do with performance. Good companies are full of good employees so pretty much anyone could be a successful CEO.

Critique this statement, with examples where possible. To the extent that you (dis)agree, consider the:

(a) extent to which executives might influence a Board of Directors (5 marks); (b) notion of supply and demand for senior executives for a public company (5 marks); and, (c) form of payment (cash, stock, or otherwise) and the timing (deferral) of this (5 marks).