Which one of the following is least likely to encourage managers to act in the best...
Which one of the following is least likely to encourage managers to act in the best interest of shareholders?
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Shareholder election of the board of directors, who in turn select managers |
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Threat of a takeover by another firm |
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Linking manager compensation to share value |
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Compensating managers with fixed salaries |
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Compensating managers with stock options |
Homework Answers
Compensating managers with fixed salaries
If managers of the firm will have fixed salaries then it will not encourage the managers to act in the interest of shareholders as their compensation is independent of firm and stock performance.
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Which one of the following is least likely to encourage managers
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