QUESTION 1 Read the scenario and answer the question HR in Action As a new board member for Personal Best, a home health aide provider, Karen Thompson was interested when the CEO of the company was asked to leave the room during a board meeting. One of the more experienced members of the board then said, "We have to talk about executive compensation at Personal Best." Soon the room was in a bit of an uproar One board member said, "I just read an article stating that the highest paid CEOs are the worst performers for companies Another board member said, But we have to pay the CEO enough to be competitive with other companies in our industry Finally, a board member spoke up and said, "We have a lot of concerns around pay, but can we all agree that our most important objective is to make sure that our CEOS financial health rises and falls with the health of our organization? Everyone in the room agreed that this was true Based on the board's understanding of their most important objective, they should focus their conversation about CEO pay on which of the following areas? porks base salary long-term incentives or bonuses short-term incentives or bonuses QUESTION 2 Match each description with a long-term incentive plan This grant is analogous to an annual bonus except that the measurement period exceeds one year. The value of the grant can be expressed as a flat dollar amount or converted to a number of units of equivalent aggregate value Rights granted to executives to purchase shares of their organization's stock at an established price for a fixed period of time Stock price is usually set at market value at the time the option is granted Cash or stock award determined by an increase in stock price during any time chosen by the executive in the option period it doesn't require executive financing Opportunities for executives to purchase shares of their organization's stock valued at full market or a dricount price often with the organization providing financial assistance Grant of units equal in value to the fair market value or book value of share of stock on a specified date the executive will be paid the appreciation in the vace of the units up to the time Grant of stock or stock units of a reduced pnce with the condition that the stock not be transferred or sold by risk of forfeture) before a specified employmo dale Grants of actual stock or phantom Stock unds Vilis contingent on both predetermined performance objectives over a specified period of time and the fock market A phantom stock stock purchase C stock appreciation rights (SARI) D performance shares Estock options F performance units Grostricted stock