Certified Executive Compensation Professional Exam

Question 1

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?

A. The mission statement

B. The business plan

C. The corporate objective

D. The competitive strategy

Correct Answer: D

Question 2

The XYZ Company focuses on maintaining/increasing market share and its products tend to be more evolutionary than revolutionary. What stage of the business lifecycle is XYZ most likely in?

A. Mature

B. Decline

C. Growth

D. Start-up

Correct Answer: A

Question 3

Regarding key competencies for financial management, HR management and resource management, what sets top performers apart?

A. The ability to prioritize which is most critical in any given situation and allocate time and resources accordingly

B. The level of formal education in each area

C. Effective interpersonal and communication skills that can overshadow minor deficiencies in any one area

D. The ability to tie them together, distill key messages and make impactful decisions

Correct Answer: D

Question 4

Which of the following is a type of variable pay?

A. Piece rate

B. Pay for time not worked

C. Hourly pay

D. Bonuses

Correct Answer: D

Question 5

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

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

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

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

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

Correct Answer: B

Question 6

Which of the following statements is most accurate regarding pay grades/bands?

A. They may overlap with minimums and maximums falling within adjoining grades

B. They represent the difference between the midpoint and the maximum of a given salary grade

C. They identify the actual compensation paid to each employee

D. They include incentives that are paid out at certain times of the year

Correct Answer: A

Question 7

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

A. Use multiple media

B. Include all details related to the issue

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

D. Keep them brief

Correct Answer: D

Question 8

How do quarterly reports most commonly compare to the annual report?

A. The quarterly reports are more detailed. The annual report provides similar data in summary form.

B. The annual report is required and the quarterly reports, while commonly used, are optional.

C. The quarterly reports are not as detailed as annual reports, and might not match due to changing accounting estimates over the year.

D. The cumulative information on the four quarterly reports adds up to the information on the annual report.

Correct Answer: C

Question 9

As a general rule, what are individual contributors most likely to ask about their compensation?

A. How the company makes pay decisions that affect them

B. What the take-home pay will be

C. How their pay compares to co-workers

D. How the company sets compensation budgets

Correct Answer: A

Question 10

Understanding basic organization design principles is an example of what key competency for compensation professionals?

A. Financial Management

B. Resource Management

C. Policy Management

D. HR Management

Correct Answer: D

WorldatWork Certified Executive Compensation Professional - CECP Exam Practice Test

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