CBP Compensation and Total Rewards 2

Question 1

Which type of incentive plan gives employees the right to purchase company stock at a fixed price within a specified period?

Accepted Answer

Stock options

Answer

Restricted stock units (RSUs)

Answer

Employee stock purchase plan (ESPP)

Answer

Stock appreciation rights (SARs)

Question 2

What is the purpose of a salary survey in compensation benchmarking?

Accepted Answer

To compare internal pay rates to external market pay levels for similar jobs

Answer

To determine FLSA exemption status for new positions

Answer

To calculate benefit costs as a percentage of total compensation

Answer

To set pay grades for union bargaining

Question 3

What does the term 'pay mix' refer to in total compensation design?

Accepted Answer

The proportion of fixed base pay versus variable/incentive pay in total direct compensation

Answer

The mix of cash and non-cash benefits in the total package

Answer

The blend of seniority and performance in merit increases

Answer

The ratio of executive pay to average employee pay

Question 4

Which pay philosophy means an organization sets pay rates at the 50th percentile of the relevant labor market?

Accepted Answer

Meet the market

Answer

Lead the market

Answer

Lag the market

Answer

Hybrid positioning

Question 5

Under Section 162(m) of the IRC, deductions for compensation paid to certain covered executive officers are limited to:

Accepted Answer

$1 million per year

Answer

$500,000 per year

Answer

$2 million per year

Answer

No limit if tied to performance

Question 6

What is the primary goal of a pay-for-performance compensation system?

Accepted Answer

To link compensation increases to individual, team, or organizational performance results

Answer

To ensure all employees receive equal pay increases

Answer

To eliminate base pay differences between job grades

Answer

To comply with FLSA overtime rules