Which of the Following Does Not Assist in Ensuring Managers

question 127

Multiple Choice

Which of the following does not assist in ensuring managers act in the best interest of owners?

• A) A compensation package for managers that ties their salary to the firm's share price.
• B) Managers are promoted only if the firm prospers.
• C) The threat that if the firm does poorly, shareholders will use a proxy fight to replace the existing management.
• D) There is a high degree of likelihood the firm will become a takeover candidate if the firm performs poorly.
• E) A compensation package for managers that is all cash with no ties to performance.

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