An Effective Way to Align Bank Managers' Interests with Shareholders

question 10

True/False

An effective way to align bank managers' interests with shareholders' goal of higher returns is to compensate the managers with fixed salaries without a bonus.

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Definitions:

Retirement Plan

A financial arrangement designed to replace employment income upon retirement, which may involve contributions by employers, employees, or both.

Contributions

Amounts given or payments made towards a common goal, project, or for the benefit of a group.

Compounded Semi-annually

A method where interest is calculated and added to the principal amount twice a year.

Quarterly

Happening quarterly or four times annually.