Which of the following correctly reflects what constitutes reasonable executive compensation?

Reasonable executive compensation is primarily determined by how well the compensation aligns with what is considered competitive within the industry. This means that the amounts should be comparable to what other executives in similar roles and industries are earning. By being fairly aligned with industry standards, organizations can attract and retain talented leadership while also ensuring that compensation packages are justifiable to shareholders and stakeholders alike.

This context considers various factors such as market rates for similar positions, the executive's qualifications, and the company's financial performance. Option C emphasizes the importance of benchmarking compensation against industry peers, which is a key principle in determining what is reasonable.

Other options lack the necessary grounding in industry standards. Approvals from the board of directors alone don’t ensure that the compensation level is appropriate within the competitive landscape (as suggested in option A). While employee satisfaction and morale can play a role in compensation discussions, they do not directly establish what is considered reasonable compared to industry benchmarks (as in option B). Finally, offering compensation that is significantly lower than sector averages (as suggested in option D) may lead to challenges in attracting skilled executives and could signal financial distress or management issues, negating the importance of aligning compensation with industry standards.