Which of the following is the LEAST likely reason for the distance between executive performance and long-term incentives?
A) Executives rarely know how much their equity in the firm is worth.
B) Executives are unlikely to have control over the value of the company's stock.
C) Incentive plans are not always consistent with the firm's long-term strategic objectives.
D) Golden parachutes fail to address what to pay executives when they are terminated from a firm.

Question

Quizplus · Accepted Answer

While golden parachutes may contribute to the misalignment of executive performance and long-term incentives, they are not the least likely reason for this disconnect. Options A, B, and C are more likely reasons as executives may not have a clear understanding of the value of their equity, may not have control over the stock's value, and may not have incentive plans that align with long-term objectives.

Which of the Following Is the LEAST Likely Reason for the Distance