Managers are spurred on by incentive schemes that provide big returns if shareholders gain but are valueless if they do not.

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Managers are typically motivated by incentive schemes that tie their pay to the performance of the company's stock. These schemes often include performance-based bonuses or stock options that provide significant financial rewards if the company's share price rises, but little to no payoff if the price falls. This encourages managers to prioritize actions that will boost the value of the company in the eyes of shareholders, even if those actions are not in the best interests of other stakeholders or the long-term health of the company.

Managers Are Spurred on by Incentive Schemes That Provide Big