Which of the following is a routine way that boards try to align the interests of managers and stockholders?

Question

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Tying management compensation to the performance of the company's common stock price is a routine way for boards to align the interests of managers and stockholders. This ensures that managers are motivated to make decisions that increase the value of the company's stock, which in turn benefits the shareholders. A and B may be possible actions, but they are not routine ways to align the interests of managers and stockholders. D is not an effective way to align interests, as managers may increase dividends at the expense of future growth opportunities, which may not necessarily benefit the shareholders in the long run.

Which of the Following Is a Routine Way That Boards