Which of the following is not a type of agency cost that arises in managerial compensation?
A)Management's desire for perquisites
B)Management's risk aversion
C)Management's desire for outcome-based pay systems
D)Management's focus on short-term performance and pay

Question

Quizplus · Accepted Answer

Agency costs in managerial compensation typically arise from conflicts of interest between management and shareholders. These include management's desire for perquisites, risk aversion, and focus on short-term performance. Management's desire for outcome-based pay systems is actually a mechanism to align the interests of management with those of the shareholders, not a source of agency cost.

Which of the Following Is Not a Type of Agency