Certified Executive Compensation Professional (CECP) Practice Test

Questions # 1:

What choices are most commonly faced by companies in the decline phase of the business lifecycle?

Options:

Whether to improve productivity, obtain new operating capital or generate new sales growth

Whether to reinvest in existing products, create new products or maximize profits with current products as long as possible

Whether to acquire competitors with greater market share or merge with more successful companies

Whether to increase sales, maximize distribution capacity or increase efficiency to meet growing demand

Questions # 2:

Regarding presentations to executives, which of the following is most accurate?

Options:

Keep them brief

Use multiple media

Include all details related to the issue

Leave backup data out of the presentation so there is time to develop an effective response to unexpected questions

Questions # 3:

What is the most common term for the broad framework of principles and approaches that guide day-to-day decisions affecting the business, including how it positions itself in the market?

Options:

The business plan

The corporate objective

The mission statement

The competitive strategy

Questions # 4:

Which of the following is the earnings available to equity owners after paying debt and taxes?

Options:

EBIT

EPS

Net income

Operating profit

Questions # 5:

Using efficient and cost-effective approaches to integrate technology into the workplace is most likely to do what?

Options:

Reduce compensation expense

Improve program efficacy

Select the best vendors

Compensate employees competitively

Questions # 6:

What is the most accurate definition of organizational vision?

Options:

A description of who the organization is, where it is headed and what it wants for the future

A written explanation of the intention or purpose of the organization and why it is in business

A statement of what kind of organization it wants to be and the guiding principles and/or beliefs shared by stakeholders

A detailed account of the organization’s goals, directions to achieve them and how it will compete

Questions # 7:

What is a primary purpose of pay grades or bands?

Options:

To identify a compensation range in which to group multiple jobs with similar value

To meet legal and regulatory requirements for classifying jobs according to market value

To provide documentation that supports termination decisions

To justify paying some employees less than market based on internal administrative limitations

Questions # 8:

Which of the following are the two primary elements of benefits?

Options:

Mental health coverage and health care coverage

Pay for time not worked and income protection programs

Unemployment and disability

Defined contribution and defined benefits plans

Questions # 9:

Which of the following best describes the guiding principles and/or beliefs shared by stakeholders in an organization?

Options:

Mission

Vision

Values

Strategy

Questions # 10:

Regarding market position, a business with a high market share but low growth potential is typically referred to as what?

Options:

A Star

A Question Mark

A Market Leader

A Cash Cow

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