When Managers' Compensation Plans Are Tied in a Meaningful Manner

question 45

Multiple Choice

When managers' compensation plans are tied in a meaningful manner to the profits of the firm, agency problems:

• A) can be reduced.
• B) will be created.
• C) are shifted to other stakeholders.
• D)are eliminated entirely from the firm.

---

Definitions:

Ionic Bond

A chemical bond formed between two ions with opposite charges, where one atom donates an electron to another, leading to an attraction between the ions.

Covalent Bond

A strong chemical bond where two atoms share a pair of electrons to achieve a fuller outer shell of electrons.

Hydrogen Bond

A weak chemical bond between an electronegative atom, like oxygen or nitrogen, and a hydrogen atom bound to another electronegative atom, contributing to the structure and properties of molecules.

Atoms

The basic unit of a chemical element, consisting of a nucleus of protons and neutrons, with electrons orbiting around them.