# Percentage of the CEO's total earnings is tied to profits

Suppose compensation is given by W = 450,000 + 220p + 15S, where W = total compensation of the CEO, p = company profits (in millions) = $300, and S = Sales (in millions) = $500. What percentage of the CEO's total earnings is tied to profits of the firm?

A. 6.0%

B. 7.9%

C. 12.6%

D. 43.4%

Please show calculations.

© BrainMass Inc. brainmass.com October 9, 2019, 9:38 pm ad1c9bdddfhttps://brainmass.com/economics/cost-benefit-analysis/percentage-of-the-ceo-s-total-earnings-is-tied-to-profits-192529

#### Solution Preview

Plug in the numbers to calculate the compensation at given levels if ...

#### Solution Summary

Answers a question on how to calculate the CEO's compensation given fixed and variable compensation components.

$2.19