Which of the following forms of compensation is most likely to align the interests of managers and shareholders?

Question

Quizplus · Accepted Answer

A salary that is paid partly in the form of the company's shares aligns the interests of managers and shareholders because managers will benefit from an increase in share price just like shareholders. This incentivizes managers to make decisions that will increase the company's value and grow the share price. It also creates a sense of ownership and accountability among managers. The other options do not directly tie compensation to the performance of the company and therefore do not necessarily align the interests of managers and shareholders.

Which of the Following Forms of Compensation Is Most Likely