Analysis Intermediate: Weighing Management Quality

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1.
You can get information on the backgrounds and qualifications of the managers of companies you are interested in from the Securities and Exchange Commission.
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True. Companies include information on their managers in their shareholder statements, which are filed with the SEC.
2.
How much money the company pays its CEO and top management is _______.
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An important sign of how the company has set up its incentive system. The compensation of top corporate officers is a touchy subject, mostly because a lot of corporate officers are paid a great deal of money. We dont have any hard and fast rules for determining how much is "too much," but at the extremes, executive pay can eat up a significant chunk of corporate profits, which eats directly into shareholder returns.
3.
A companys board of directors represents its management.
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False. The board represents the shareholders and their interests.
4.
Whom does the board of directors of a company represent?
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The shareholders. The board is elected by the shareholders and technically represents them.
5.
Should an investor look with suspicion on companies whose employees do not have a clear separation between business and personal relationships?
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Yes. Lack of a boundary can be very bad for business.