Shareholders Rely on CEOs to Adopt Policies and Strategies That

question 19

Multiple Choice

Shareholders rely on CEOs to adopt policies and strategies that maximize the value of their shares. To motivate CEOs to maximize the value of their companies, boards of directors can consider all of the following options except one. Which one is it?

• A)Boards can require that the CEOs become substantial owners of company stock.
• B)Salaries, bonuses, and stock options can be structures to provide rewards for superior performance.
• C)Salaries can be structured to provide penalties for poor performance.
• D)Dismissal for poor performance is not an option.

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Definitions:

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