Which item is most directly tied to aligning incentives with performance?

• A. Retention plans
• B. Incentive structures
• C. Risk management protocols
• D. Board committee composition

Answer: (B)

Aligning incentives with performance means designing rewards that move with the outcomes you want. Incentive structures are the mechanism that ties compensation, bonuses, equity, and other rewards directly to specific performance metrics, so the more targets are hit, the greater the payoff. That direct linkage is why this option best aligns incentives with performance. Retention plans focus on keeping talent and may include performance hurdles, but their primary aim isn’t to tie ongoing pay to performance outcomes. Risk management protocols aim to control risk and ensure compliance rather than reward performance. Board committee composition governs governance and oversight rather than the reward-and-m consequence structure that drives performance.