Compared to owners, employees receive a large fraction of their incomes from their employers and are consequently very dependent on the fortunes of that company in the marketplace. From a 'risk-sharing' perspective, an employee tends to prefer:
A) a flat salary.
B) output-based incentive pay.
C) year-end based performance pay.
D) incentive based pay

Question

Quizplus · Accepted Answer

A flat salary provides stability and reduces the risk associated with the company's performance, which is preferable from a risk-sharing perspective for employees.

Compared to Owners, Employees Receive a Large Fraction of Their