Which one of the following is least apt to encourage managers to act in the best interest of shareholders?
A)Shareholder election of the board of directors,who in turn select managers
B)Threat of a takeover by another firm
C)Linking manager compensation to share value
D)Compensating managers with fixed salaries
E)Granting stock options to key managers

Question

Quizplus · Accepted Answer

Compensating managers with fixed salaries does not provide any direct financial incentive for them to act in the best interest of shareholders. The other choices provide incentives for managers to maximize shareholder value or align their interests with those of shareholders in different ways.

Which One of the Following Is Least Apt to Encourage