To reduce the incentives of financial institution managers to engage in excessive risk taking regulators might require that bonuses be ________.
A) paid immediately
B) paid after several years
C) paid after several years only if the firm remains in good financial health
D) paid in the form of stock options

Question

Quizplus · Accepted Answer

Delaying bonuses and tying them to the firm's long-term financial health aligns managers' incentives with the firm's stability, discouraging excessive risk-taking.

To Reduce the Incentives of Financial Institution Managers to Engage