The type of compensation that some boards think is better at truly aligning the incentives of managers with those of shareholders is a(n) ________.
A) bonus
B) restricted stock grant
C) raise
D) mixed compensation portfolio

Question

Quizplus · Accepted Answer

Restricted stock grants tie the compensation of managers directly to the performance of the company's stock. This makes the managers more focused on maximizing shareholder value, as their own compensation is directly tied to it. Bonuses and raises can also be effective incentives, but they do not provide the same direct alignment with shareholder interests as restricted stock grants. A mixed compensation portfolio could also be effective, but it would depend on the specific mix of incentives and how well they align with shareholder interests.

The Type of Compensation That Some Boards Think Is Better