Which one of the following means of management compensation is designed to help eliminate the agency problem?
A) Providing cost of living adjustments.
B) Increasing health care benefits.
C) Offering stock options.
D) Providing annual raises.
E) Providing a corporate jet.

Question

Quizplus · Accepted Answer

Offering stock options aligns the interests of the managers with those of the shareholders, as managers are incentivized to increase the company's stock price, thereby addressing the agency problem.

Which One of the Following Means of Management Compensation Is