Question

21. Which one is least apt to convince managers to work in the best interest of...

21. Which one is least apt to convince managers to work in the best interest of the current stockholders

A. Receiving a bonus based on company profits

B. Receiving stock options

C. Being threatened by a proxy fight

D. Receiving a bonus based on company size

E. Receiving company shares based on increases in share value

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Answer #1

Proxy fights are unhealthy and unfriendly contest for control over an organization. These proxy fights are carried out by corporate activists against the incumbent management. As such, proxy fights never provide any incentive for managers to work in the best interest of the current stock holders.

Answer is C. Being threatened by a proxy fight

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