Which of the following statements is false regarding linear typical compensation

Question

Which of the following statements is false regarding linear typical compensations plans? compensation plans versus Typical compensation arrangements encourage managers to lie and cheat. The kinks in typical pay-for-performance lines (caused by the minimum hurdle bonus and the maximum cap) create strong incentives to game the system. A. B. C. Typical compensation arrangements provide a strong incentive to increase the D. A linear compensation plan rewards managers for a given level of performance current year's earnings at the expense of next year's. based on a minimum hurdle and a maximum payout.

Explanation / Answer

The false statment is :

D. A linear compensation plan rewards managers for a given level of performance based on a minimum hurdle and a maximum output.

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