Share-based compensation plans are meant to provide staff with a) long-term performance...
Question:
Share-based compensation plans are meant to provide staff with
a) long-term performance incentives.
b) short-term performance incentives.
c) immediate cash compensation.
d) none of these.
Share-Based Compensation Plans:
Share-based compensation plans are issued to the employees by a company to increase the involvement of employees in the company. The company issues share option plans with stock appreciation rights, fixed compensatory share option plans, and performance-based compensatory share option plans.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answerThe correct answer is option (a).
Share-based compensation plans are meant to provide staff with long-term performance incentives.
Explanation: The...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:

from
Chapter 13 / Lesson 14Compensation is typically disbursed to employees in exchange for services rendered throughout the course of employment. Learn about direct employee compensation, indirect employee compensation, and the differences between monetary and non-monetary forms of compensation.
Related to this Question
- One disadvantage of the payback period is that: a. it is sometimes used as a crude measure of risk. b. managers may choose investments with quick payback periods to maximize short-term criteria on which their own bonuses, etc. may be based. c. it canno
- The stock option form of bonus payments to managers usually: a. Motivates well even in extended market downturns. b. Can lose some motivation because of the delay in reward. c. Focuses on the short-term. d. Is not consistent with shareholder interests.
- The stock option form of bonus payments to managers usually: a. motivates well even in extended market downturns. b. can lose some motivation because of the delay in reward. c. focuses on the short-term. d. is not consistent with shareholder interests. e.
- Generally, the current and deferred types of bonus payment options currently in use tend to focus the manager's attention on short-term performance measures, most commonly: a. division profit b. after-tax corporate profit c. cash flow d. growth in firm va
- The time-adjusted rate of return method of ranking projects tends to favor: a. long-term, high-yield projects. b.short-term, high-yield projects. c. short-term, low-yield projects. d.long-term, low-yield projects.
- The critics of accounting profits make a distinction between long-term value (which they consider to be 'good') and short-term results (which they consider to be 'bad'). But what is long-term value without strong short-term results piled upon each other?
- Dharma Initiative, Inc., has a defined benefit pension plan. Characteristics of the plan during 2016 are as follows: The expected long-term rate of return on plan assets was 8%. There were no AOCI ba
- Which of the following is an advantage of the balanced scorecard (BSC) for evaluating a manager's performance? a) It covers the range of activity over the short term only. b) It covers the range of activity over the long term only. c) It forces the com
- Misalignment between stressed un budget and used to reward employees and managers can limit the advantages of budgeting a) sales goal bonus b) performance goals, performance measures c) performance goals, participative goal d) resource goal bonuses
- _____ are specific tangible achievements that can be observed on short-term basis. a. key success factors b. guidelines c. objectives d. performance measures
- During tight money periods: A. long-term rates are higher than short-term rates. B. short-term rates are higher than long-term rates. C. short-term rates are equal to long-term rates. D. the relationship between short-term and long-term rates remains unch
- The aggregate supply curve is upward sloping in: A. the short and long run. B. neither the short nor long run. C. the long run, but not the short run. D. the short run, but not the long run.
- What are the advantages of obtaining long-term funds by the issuance of bonds rather than additional shares of capital stock? What are the disadvantages?
- Pay-for-performance programs: a. result in decreases in profits. b. tie rewards to employee effort. c. are easy to implement and measure. d. tie rewards to firm's profitability.
- Which of the following is not a characteristic of a non-compensatory stock purchase plan? (a) It is open to almost all full-time employees (b) The discount from market price is small (c) The plan offers no substantive option feature (d) All of the above.
- Under which one of the following circumstances is the return on investment performance measure more likely to be misleading in comparing the performance of several divisions? (a) Long-term assets are stated at current fair market value (b) Long-term asset
- The term "opportunity cost" is best defined as: a. the amount of money paid for an item, taking possible discounts into account. b. the amount of money paid for an item, taking inflation into account. c. an irrelevant decision factor. d. the benefit assoc
- Asset transformation can be described as: A) borrowing long and lending short. B) borrowing short and lending long. C) borrowing and lending only for the short term. D) borrowing and lending for the long term.
- There are two main types of employer-sponsored retirement plans: defined benefit and defined contribution. What are they? How do they differ? What other types of retirement plans are available? Provide an answer with a minimum of 75 words only.
- Compare and contrast the three (3) methods for depreciating plant assets. Recommend the method that maximizes profits for both a shorter period of time and a longer period of time.
- The following is true of stock given to an employee as compensation: |1) Stock which is not subject to a substantial risk of forfeiture triggers immediate compensation income to the employee. |2) St
- A compensatory employee stock option plan has all of the following characteristics except a) no significant discount is offered from the existing market price. b) non-standard terms exist giving the employees a longer time to enroll and the ability to c
- Which of the following best describes tactical profit plans? a. Detailed, short-term, broad responsibilities, qualitative. b. Broad, short-term, responsibilities at all levels, quantitative. c. Detailed, short-term, responsibilities at all levels, quantit
- The major categories of compensation are: a. current compensation and deferred compensation. b. current compensation, qualified deferred compensation and no-qualified deferred compensation. c. current compensation, fringe benefits, and deferred compensat
- Discuss the different compensation plans that a business could offer their employees. Many employees offer incentive plans to their employees. Discuss some of the options for incentive plans.
- The balanced scorecard critical success factors (CSFs) provide strong motivation in bonus compensation plans if the non-controllable factors are: a. emphasized b. separated c. recognized d. excluded e. controlled
- Assess the scorecard in diminishing and overcoming myopic behavior (an over-focus on a short-term financial (objective) performance measure to the detriment of non-financial goals and initiatives in t
- Misalignment between -blank- stress in budgets and -blank- used to reward employees and managers can limit the advantages of budgeting A) Sales goals bonuses B) Performance goals: performance measur
- Suppose that your strategic plan is to retire comfortably at the age of 55. List several long-term objectives, short-term objectives, and tactics that would enable you to accomplish this goal.
- The balanced scorecard is said to be "balanced" because it measures _______. (a) short-term and long-term objectives (b) financial and non-financial objectives (c) internal and external objectives (d) All of the above are correct.
- The percentage-of-completion method of accounting for long-term construction-type contracts is preferable when: A. the collectability of progress billings from the customer is reasonably assured. B. the contracts are of relatively short duration. C. es
- In terms of evaluating mutually exclusive projects, the internal rate of return (IRR) method mistakenly favors investment proposals with: a. Short useful lives. b. Long useful lives. c. Moderate cash flow returns. d. Large residual values.
- What is the role of the contribution margin in short-term decision making?
- The financial leverage characteristic of long-term debt results in? A. a reduction of the risk that creditors will not be paid. B. a magnification of ROE relative to what it would be without long-term debt. C. a magnification of ROI relative to what it
- ___ are specific tangible achievements that can be observed on a shorten basis. a. key success factors b. guidelines c. objectives d. performance measures
- Which of the following is not a characteristic of a defined benefit pension plan? a. Benefits are based on actual contributions plus amounts earned on the contributions. b. Benefits are linked to the number of years worked by the employee. c. Benefits
- Give three examples of how managers may improve short-run performance to the detriment of long-run results.
- Which of the following is important when evaluating long-term investments? a. Investments must earn a reasonable rate of return. b. Employees are able to determine and propose capital equipment for their divisions or departments. c. Proposals should match
- The most common type of discount lending, ________ credit loans, are intended to help healthy banks with short-term liquidity problems that often result from temporary deposit outflows. a) secondary b) primary c) temporary d) seasonal
- The pay system that is most frequently used in a union setting is a(n): a. incentive system. b. merit system. c. bonus system. d. seniority system
- Analyze deferred compensation arrangements. Based on your analysis, justify whether or not these arrangements are fair to all employees.
- Which of the following share option plans would involve the creation of a liability account over the life of the plan? A. share option plans with stock appreciation rights. B. fixed compensatory share option plans. C. performance-based compensatory sha
- Investment instruments used to invest temporarily idle cash balances should have which of the following characteristics? 1. High expected return, low marketability, and a short term to maturity 2. High expected return, readily marketable, and no maturity
- According to expectancy theory, the amount of effort employees exert on a specific task depends on their __________. a. expectations of the outcome b. manager's expectations of their performance c. perception of the importance of the task d. level of
- If the actual return on pension plan assets in a defined benefit plan exceeds the expected return, how is the difference treated? a) The difference is recorded as a deferred loss. b) The difference is recorded as a deferred gain. c) The difference is reco
- Because of their ________ liquidity, ________ U.S. government securities are called secondary reserves. A) low; short-term B) low; long-term C) high; short-term D) high; long-term
- Select the item that does not relate to fraud risk factors associated with debt obligations. a. Covenants violations are not properly disclosed. b. Options are backdated. c. Long term or short-term misclassifications. d. Long term or short term author
- Discuss how the pressure to perform on Wall Street (short-term performance) may influence an organization decision to misstate its financial performance.
- The proportional performance method spreads the profit over the periods in which services are being performed. What arguments could be made against this method of revenue recognition for newly formed service-oriented companies?
- Is SFAS No. 87 s argument favoring recognition of pension liability for accumulated benefits consistent with the conceptual framework project?
- You are given a task to select an investment for medium-term (three to five years) and long-term (more than five years). Identify some of the qualitative factors that must be considered when selecting a company. Think in terms of financial performance and
- Individual reward schemes have which of the following advantages? I) They relate to individual effort. II) They reward only good performers. III) They discourage dysfunctional competition between individuals. a. I and II b. II and III c. I and III d. none
- Which of the following is not included among the assumptions needed to estimate postretirement healthcare benefits? a. Employee turnover b. Expected retirement age of plan participants c. Life expectancy of plan participants d. Return on plan assets
- Are pension benefits going up or down at this time in the economy?
- Principals can use all of the following techniques to control their agents (in a business setting) except: a) compensation tied to performance. b) stock options. c) bond redemption. d) the threat of firing. e) perquisites.
- Which of the following types of measures focuses primarily on income statement information? A. long-term solvency measures. B. short-term liquidity measures. C. market valuation measures. D. profitability measures. E. None of the answer choices is co
- The following is a characteristic of a retirement plan that meets the qualifications of Code Sec. 401: 1) The plan may discriminate in favor of highly compensated employees. 2) The plan may not engage in transactions with a disqualified person because i
- You have just been promoted to the position of Director of Human Resources. Your company has decided to offer a pension plan to its employees. 1) Compare and contrast the different types of pension plans and decide which plan to offer to your employees.
- A manager who believes that increasing all employees' pay will improve every employee's job motivation is assuming: a. all employees focus primarily on extrinsic work values. b. every company can afford satisfied employees. c. work values are short term a
- If the managerial labor market is efficient, why do we give bonuses or compensation to the managers and executives?
- Sometimes compensation packages include bonuses designed to provide performance incentives to employees. The difficulty a bonus can cause is not an accounting problem, but a math problem. The complica
- Which one of these best describes a flexible financing policy? a. All of a firm's assets are financed with long-term debt. b. Only long-term assets are financed with long-term debt. c. Short-term financing will be used to finance seasonal peaks. d. Fir
- Which of the following would be considered an operational (short term) HR activity? A. Examining labor force trends B. Preparing staffing plans C. Developing a recruitment marketing plan D. Establishing a reward system that is linked to strategic goals
- Short-term decision making differs from the normal operating decisions in two ways; which of the following are the two ways? A) Short-term decisions can not be planned and address routine operating decisions. B) Short-term operating decisions are unique
- Differential analysis is a common method used when making which decisions? a. long-term capital project decisions b. short-term business decisions c. sunk cost decisions d. long-term business decisions
- Deferred (unearned) compensation is creditWhich of the following statements is correct? A. Restricted stock awards can be underwater. B. Restricted stock awards are more dilutive than stock options. C. A and B. D. Neither A nor B.d when: A. Work is com
- If a saver had $12,540 to invest for a short period of time, what alternatives would be available?
- The most common measure of short-term liquidity is the: a. acid-test. b. current ratio. c. quick ratio. d. working capital.
- What are the primary differences in reporting benefits associated with a pension plan and those associated with post-retirement health benefits?
- Advertising is: A. non-personal, indirectly paid presentation of any organization, service, or product. B. a short-term inducement of value offered to arouse interest in buying a good or service. C. methods used to get a non-personal, indirectly paid p
- Liquidity ratios measure the ability of an entity to: a) survive in the long-term b) meet its short-term obligations and unexpected cash needs c) generate profit d) All of the options are correct.
- The emphasis on leased and temporary employees in an organization will only lead to a decrease in employee morale. These employees come in, do their jobs, and then leave it up to the full-timers to handle the details. Build an argument supporting this sta
- When discussing the roles of budgets, a control role includes: A. identifying organizational objectives and short-term goals. B. developing long-term strategies and short-term plans. C. measuring and assessing performance against budgeted amounts. D. deve
- Long-term plans are called _____ plans. a. strategic b. operational
- Because economic and competitive environments frequently change, organizations should: 1. set a long-term plan and stick to it. 2. develop contingency plans. 3. save time and money by cutting back on planning. 4. eliminate any long-term strategic plans, b
- a). Describe the various types of employee benefits plans typically offered by small businesses. What factors appear to affect the decision of benefits? b). Describe the company's financial and managerial issues associated with both the required and opti
- Which of the following describes a transitory allocation? a. Allocations that occur during the same year. b. Allocations that occur within one year. c. Allocations that offset in future years. d. Allocations that take advantage of nonpartner attribute
- There are several disadvantages to the payback method, among them: a. Payback ignores the time value of money. b. Payback can be used in conjunction with time adjusted methods of evaluation. c. Payback is easy to use and to understand. d. None of the abo
- A major element in budgetary control is: a. the approval of the budget by the stockholders. b. the comparison of actual results with planned objectives. c. the preparation of long-term plans d. the valuation of inventories.
- The benefits of comparing actual performance of the operations against planned goals include all of the following except: a) providing prompt feedback to employees about their performance relative to
- Which of the following statements is correct? A. Stock options and restricted stock awards both have vesting periods. B. The objective of employee stock purchase plans (ESPPs) is to make employees more loyal and motivated to work hard. C. A and B. D. N
- Group incentive plans include: a) standard hour plan b) improshare c) stock options d) sales incentives
- Which of the following actions could not affect the liquidity of receivables? a. Shortening the credit terms b. Lengthening the credit terms c. Right of return privileges d. Lengthening the outstanding period e. All of the above could affect the liqu
- What do the following actuarial terms mean? \\ *accumulated benefits *actuarial liability *vested benefits *service cost *unfunded accumulated benefits
- Risk aversion by managers should be recognized when revising compensation plans because: a. compensation mix (salary, bonus) can influence a manager's risk aversion. b. most companies want risk-averse managers. c. most companies want risk-taking managers.
- When using the time adjusted rate of return method to rank investment decisions, the general rule is: a. the lower the time-adjusted rate of return, the more desirable the project. b. the higher the time-adjusted rate of return, the more desirable the p
- One purpose of controlling activities is to: a. monitor day-to-day operations to ensure that processes are operating as expected. b. translate long-term strategy into a short-term plan. c. perform variance analysis and prepare performance reports. d. tran
- How does long term goal planning affect budget decisions? Why? Give an example where a long term goal affected a budget decision.
- We know that both internal and external users have not only short-term success but long-term success of company top of mind. One way that users work to determine short-term and long-term success is by use of the Balance Sheet. On the Balance Sheet, a user
- The principal advantage of the completed-contract method is that: a. reported revenue is based on final results rather than estimates of unperformed work. b. it reflects current performance when the period of a contract extends into more than one accounti
- Define the term quality of earnings. List the techniques that management can use to improve a company's reported earnings performance in the short run. Give examples of low-quality earnings components.
- Employees who value _________ are most likely to be attracted to jobs allowing them to telecommute. a. work variety b. opportunities for early retirement c. flexibility d. a fast-track promotion path
- There are several strategies for short-term financing. Describe two strategies and include the advantages and disadvantages of each strategy.
- All of the following are benefits of just in time processing except? a. Increase in efficiency b. Eliminates poor quality c. Has the potential to overwork employees d. All of the above are benefits
- The principal advantage of the completed-contract method is that: a. Reported revenue is based on final results rather than estimates of unperformed work. b. It reflects current performance when the period of a contract extends into more than one account
- The widespread use of accounting-based incentives to determine executive compensation is controversial for which one the following reasons? a. Earnings growth automatically increases shareholder value. b. Accounting-based incentive plans can encourage man
- Which one of the following statements is not a disadvantage of the group and composite methods of depreciation? a. faulty estimates are concealed for long periods b. gains are deferred beyond the period in which they actually occurred c. recordkeeping is
- Which one of the following statements is not a disadvantage of the group and composite methods of depreciation? a. Faulty estimates are concealed for long periods. b. Gains are deferred beyond the period in which they actually occurred. c. Recordkeeping i
- The principal advantage of the completed-contract method is that: a) reported revenue is based on final results rather than estimates of unperformed work. b) it reflects current performance when the period of a contract extends into more than one
- Which of the following is/are an extrinsic reward? a. job satisfaction b. share options c. share options and promotion d. promotion