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CEO Compensation Methods

E+ Company board of directors is considering to compensate its CEO based on 30% of either excess sales growth or excess stock price growth if the growth is in excess of 8%. Sales amounted to $200,000 with a growth rate of 23%. Common stock price grew from a total of $400,000 by 18%. If excess common stock growth method was chosen as a basis for the CEOs compensation, how much would that be?

a) $9,000
b) $10,000
c) $11,000
d) $12,000
e) None of the above

Solution Summary

Brief calculations find the CEO compensation based on excess common stock growth.