Question
- What amount is short-term in nature (salary and cash bonus), and what is based on the longterm CEOs performance? - What proportion of the
- What amount is short-term in nature (salary and cash bonus), and what is based on the longterm CEOs performance?
- What proportion of the CEOs pay is performance-based, and what proportion is not? Evaluate the relevant accounting theory to explain the composition of the CEOs pay.
- What measures of accounting performance are used to determine the CEOs bonus? Evaluate the relevant accounting theory in determining the CEOs bonus.
- Given the accounting entitys performance measures in the contract, what accounting decisions could the CEO make to maximise their bonus?
- Why would CEO prefer shortterm cash over longterm equity bonuses? Why does this not align with shareholder interests? Explain your answer using the relevant accounting theories.
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