Which of the following help convince managers to work in the best interest of the stockholders?
I.Compensation based on the value of the stock
II.Stock option plans
III.Threat of a proxy fight
IV.Threat of conversion to a partnership
A)I and II only
B)II and III only
C)I,II,and III only
D)I and III only
E)I,II,III,and IV

Question

Quizplus · Accepted Answer

Compensation based on stock value and stock option plans align managers' interests with stockholders. The threat of a proxy fight pressures managers to act in stockholders' interests to avoid losing control. Conversion to a partnership is not a typical threat used for this purpose.

Which of the Following Help Convince Managers to Work in the Best