TREX Executive Compensation Governance 2

Question 1

Under SEC rules, which executives must be included in the proxy statement's Summary Compensation Table?

Accepted Answer

CEO, CFO, and the three other highest-paid named executive officers

Answer

SEC rules require disclosure for the CEO, CFO, and the three other most highly compensated executives (named executive officers, or NEOs).

Question 2

What is the primary purpose of a clawback policy in executive compensation governance?

Accepted Answer

To recover previously paid compensation in cases of financial restatement or misconduct

Answer

Clawback policies allow companies to recoup previously paid incentive compensation when there is a financial restatement or executive misconduct.

Question 3

The Dodd-Frank Act's 'pay ratio' rule requires public companies to disclose the ratio between:

Accepted Answer

CEO total compensation and the median total compensation of all employees

Answer

The Dodd-Frank pay ratio rule mandates disclosure of the CEO's annual total compensation compared to the median annual total compensation of all employees.

Question 4

Which type of shareholder vote on executive pay is required under Dodd-Frank and is advisory in nature?

Accepted Answer

Say-on-pay vote

Answer

Say-on-pay is a non-binding advisory vote that allows shareholders to express approval or disapproval of named executive officer compensation.

Question 5

When a compensation committee retains an outside compensation consultant, what disclosure is required under SEC rules?

Accepted Answer

Whether any conflicts of interest exist and how they are being addressed

Answer

SEC rules require proxy disclosure of whether the compensation committee's consultant has any conflicts of interest and what steps have been taken to address them.

(TREX) WorldatWork Total Rewards Certification Practice Test

(TREX) WorldatWork Total Rewards Certification Practice Test

TREX Executive Compensation Governance 2