Compensation plans should

Question

Quizplus · Accepted Answer

Compensation plans should align managers' incentives with the objectives of shareholders, as this helps to ensure that the interests of the managers are aligned with those of the company's owners. This can help to motivate managers to work towards the long-term success of the company, even if it means sacrificing short-term gains. Linking incentive plans to financial performance is also important, as this can help to encourage managers to focus on maximizing profits and shareholder value. However, compensation plans should not be solely based on short-term business goals; they should take a longer-term perspective and be aligned with the overall strategic direction of the company.

Compensation Plans Should