HRM-200 5-2 Smartbook assignment Q#8

Compensation at Nonpublic Companies The executive compensation programs of thelargest public companies often include the types of equity-based compensation such as stockoptions and performance shares described in this chapter. Smaller nonpublic companies oftenhave the same types of strategic goals and want to provide the same types of compensationplans but do not have the equity types of compensation to offer because they do not have publicly traded stock.Required:1. What is the primary advantage of equity-based compensation such as stock options and performanceshares?a. It is easier to administer than flat salary or performance-based cash payments.b. Short-term stock prices cannot be influenced inappropriately by executives.c. It aligns managers’ incentives (to increase value) with those of the shareholders.d. It is more consistent with generally accepted accounting procedures than other forms of compensation.2. What types of compensation can nonpublic companies offer that would…

Compliance while investigating the shares offered to you by your potential boss, you discover that the company you are considering working for is not registered as required under the securities Act of 1933 how does this influence you as a potential employee and as a shareholder? Be sure to reference any applicable statues of laws You know that accepting this job may eventually lead to a promotion into the role of the financial manager. As the potential financial manager, what federal and shareholder requirements would you need to be familiar with in order to ensure that you are being completely compliant?

a controller argues that when a company issues stock for less than current value, the value of preexinting stockholders shares is diluted. Is this allowed and right at employee compensation ?

1) "Information asymmetry lies at the heart of the ethical dilemma that managers, stockholders, and bondholders confront when companies initiate management buyouts or swap debt for equity." Comment on this statement. What steps might a board of directors take to ensure that the company's actions are ethical with regard to all parties? 2) Assume that you are the CFO of a company contemplating a stock repurchase next quarter. You know that there are several methods of reducing the current quarterly earnings, which may cause the stock price to fall prior to the announcement of the proposed stock repurchase. What course of action would you recommend to your CEO? If your CEO came to you first and recommended reducing the current quarter's earnings, what would be your response?

Based on this topic reading answer the following questions in your discussion post. (Note address these questions and not the ones that follow question instructions) 1. What are the major recommendations of the stock compensation pronouncement? 2. How do the provisions of GAAP in this area differ from the bill introduced by members of Congress, which would require expensing for options issued to only the top five officers in a company? (Focus on comparability) 3. The bill in Congress urges the FASB to develop a rule that preserves "the ability of companies to use this innovative tool to attract talented employees." Do you believe that this will impact the neutrality of financial accounting and reporting? Explain. Your response must be a minimum of 25O words. You need to have a minimum 3 citation references in APA format. In-line citations and the complete reference must be provided.

Compliance  A.while investigating the shares offered to you by your potential boss, you discover that the company you are considering working for is not registered as required under the securities Act of 1933 how does this influence you as a potential employee and as a shareholder? Be sure to reference any applicable statues of laws  B.You know that accepting this job may eventually lead to a promotion into the role of the financial manager. As the potential financial manager, what federal and shareholder requirements would you need to be familiar with in order to ensure that you are being completely compliant?

Multiple Choice Why do companies offer stock for sale? A) the government forces them to B) they want to lay off workers C) they want to give investors a chance to make money D) the company needs money for growth

Why might a company repurchase its own stock? A) It believes that the market undervalues its shares B) To offset dilutive effects of employee stock options granted C) To recognize an economic gain when the treasury shares are later sold for a profit D) To improve earnings per share by reducing the denominator E) All of the above is it just A and B or is it all of the above

Identify the wrong statement about Shareholders and their impact to corporate objectives: a. The voting power of the shareholders is equal to the percentage of shares they own b. None of these c. Shareholders receive the appreciation of the company's value d. The board of directors' makeup is voted by shareholders of the company

You are offered a job you know that accepting this job may eventually lead to a promotion into the role of the financial manager. As the potential financial manager, what federal and shareholder requirements would you need to be familiar with in order to ensure that you are being completely compliant? While investigating the shares offered to you by your potential boss, you discover that the company you are considering working for is not registered as required under the Securities Act of 1933. How does this influence you as a potential employee and as a potential shareholder relative to any applicable statutes or laws?

Which of the following methods would be most likely to decrease the agency problems by helping motivate managers to act in the best interests of shareholders?   1. Increase the proportion of executive compensation that comes from stock options and reduce the proportion that is paid as cash salaries.   2. Eliminate a requirement that members of the board of directors have a substantial investment in the firm's stock.   3. Decrease the use of restrictive covenants in bond agreements.   4. Take actions that reduce the possibility of a hostile takeover.   5. Elect a board of directors that allows managers greater freedom of action.

Which of the following statements is true? a. Restrictive covenants in debt agreements are an effective way to reduce agency conflicts between stockholders and managers.   b. Managers generally welcome hostile takeovers since they often increase the company’s stock price. None of the choices is correct.   c. One advantage of organizing your business as a corporation is that your shareholders are not subject to limited liability.   d. An effective ethics program can enhance corporate value by producing a number of positive benefits like building shareholder confidence.

Which of the following statements are correct regarding Sarbanes- Oxley (SOX) and Dodd-Frank (DF)? I. DF requires that public firms offer an advisory vote to shareholders on top executive compensation. II. SOX imposes criminal penalties on the CEO and CFO for fraud or for retaliation on whistle blowers. III. The compliance costs for SOX can be substantial and have encouraged some firms to "go dark." IV. DF requires companies to disclose whether directors and officers are permitted to hold put options which protect their ownership position in the firm. O I and II only O I and III only O II and III only O I, II, and III only O I, II, III, and IV

Use ASC to answer the following

ASSIGNMENT TWODazzle Co. is a stock‐market listed company that manufactures personal protection equipment. At a recent board meeting of Dazzle Co., a non‐executive director suggested that the company’s remuneration committee should consider scrapping the company’s current share option scheme, since executive directors could be rewarded by the scheme even when they did not perform well. A second non‐executive director disagreed, saying the problem was that even when directors acted in ways which decreased the agency problem, they might not be rewarded by the share option scheme if the stock market were in decline. Required:(a) Explain the nature of the agency problem in detail. (b) Discuss the use of share option schemes as a way of reducing the agency problem in a stock‐market listed company such as Dazzle Co.

A corporation whose managers are separate from its owners will face zero agency costs when it uses stock options as part of its compensation package for upper managers True False

Assume you are the financial director of a public company which has been experiencing a decline in financial performance. At a board meeting it is being proposed that all directors and senior managers receive a substantial increase in pay and bonuses. One director has stated that the figures can be masked, legitimately, in the annual report and accounts.   It has also been proposed not to increase the dividend to shareholders, stating that the money is needed for essential investment. The company does have assets which are in need of replacement. What do you think about these proposals? Do they suggest good, bad, or indifferent corporate governance?

Many executives own shares in the companies they manage and are also in high tax brackets. When faced with the choice between declaring dividends and repurchasing shares, managers may opt to repurchase shares as it is not a taxable event for them unless they sell their shares and with fewer shares outstanding, the stock price will likely rise. The company's investors may prefer dividend payments. Glven the discussion in the introduction to the course, this is an example of what theory in action? Type your answer and submit

Which of the following statements is CORRECT? Select one: a. Conflict of interest between shareholders and managers is not possible. b. By definition, the agency problem can only take place in corporations but not in proprietorships and partnerships. c. Conflict of interest between shareholders and bondholders is not possible. d. Managers always work to maximize the long-run value, and therefore the price, of their company stocks. This is exactly what shareholders desire.

2 (a)There is a conflict of interest between stockholders and managers. In theory, stockholders are expected to exercise control over managers through the annual meeting or the board of directors. In practice, why might these disciplinary mechanisms not work? (b)There are some corporate strategists who have suggested that firms focus on maximizing market share rather than market prices. When might this strategy work, and when might it fail? (c)It is often argued that managers, when asked to maximize stock price, have to choose between being socially responsible and carrying out their fiduciary duty. Do you agree? Can you provide an example where social responsibility and firm value maximization go hand in hand?

What has been the main thrust of recent changes in the financial reporting rules following the financial scandals of Enron, Worldcom, etc.? Multiple Choice To improve internal control over companies' financial reporting. To add to the work of the companies' external accountants. To force the companies to disclose more of their internal information. To provide incentives to increase their net income. < Prev 27 of 50 Next