Which of the following does not persuade managers to work in the best interest of the stockholders?
A) Compensation based on the value of the stock.
B) Stock option plans.
C) Threat of a company takeover.
D) Threat of a proxy fight.
E) Purely cash compensation package.

Question

Quizplus · Accepted Answer

Purely cash compensation packages do not directly align managers' interests with those of stockholders, unlike stock-based compensation, stock options, or the threat of takeover or proxy fights, which incentivize managers to increase shareholder value to secure their positions or benefit financially.

Which of the Following Does Not Persuade Managers to Work