- CFA Exams
- CFA Level I Exam
- Topic 3. Corporate Issuers
- Learning Module 3. Corporate Governance: Conflicts, Mechanisms, Risks, and Benefits
- Subject 2. Corporate Governance Mechanisms
CFA Practice Question
Regarding corporate governance, which of the following is most likely a reason for concern when evaluating the compensation committee? The compensation committee ______
B. purchases shares on the open market to fund stock option commitments.
C. discloses information about compensation paid to executives and board members.
A. includes members of executive management.
B. purchases shares on the open market to fund stock option commitments.
C. discloses information about compensation paid to executives and board members.
Correct Answer: A
The compensation committee should be independent from executive management.
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