What happens when a company ties manager compensation to the company's stock performance?
A) It creates a significant amount of risk because of a lack of diversity since the performance indicator is based on just one stock - that of the company.
B) It has the risk that a company's stock can fluctuate widely based on factors over which the manager has no control.
C) It is accomplished through issuing stock options which shields some of risk.
D) All of the answers are correct.
Correct Answer:
Verified
Q46: What is true concerning companies that use
Q47: Which of these is a disadvantage for
Q48: What occurs when applying expectancy theory to
Q49: Which of these is the perspective of
Q50: What is a disadvantage for companies to
Q52: Which of these is an advantage for
Q53: How do decentralized companies that have many
Q54: Which of these is the perspective of
Q55: Companies generally base most of the divisional
Q56: How do companies that are large,highly integrated
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents