Which of the following compensation methods is NOT likely to reduce agency costs between shareholders and managers?
A) Share compensation-giving the CEO shares in the company as part of her salary.
B) A golden parachute-a guaranteed large lump-sum payment in the event that the CEO is fired.
C) A higher salary than that of other CEOs in similar companies.
D) Performance bonuses-a higher bonus if the company's cash flows are higher than expected.
Correct Answer:
Verified
Q73: Binomial pricing: Assume that the shares of
Q74: Adding share options and bonuses for performance
Q75: Binomial pricing: Assume that the shares of
Q76: Gizmo Motors is very likely to enter
Q77: Which of the following reasons is NOT
Q79: Binomial pricing: Consider a call option and
Q80: Which of the following statements is NOT
Q81: Risk management: OilDog Co. is a privately
Q101: What are agency costs in corporate finance,
Q111: Describe the difference between American call options
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