In a Public Stock Company, Senior Executives, Such as the CEO

question 32

Multiple Choice

In a public stock company, senior executives, such as the CEO, face agency problems when

• A) they delegate authority of strategic business units to general managers.
• B) they decide to get involved in the day-to-day operations of a company.
• C) the board of directors possesses more information about the company than they do.
• D) the firm designs work tasks, incentives, and employments that minimize opportunism.

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Definitions:

Compensation

Payment or reward given to someone, typically as reparation for loss, injury, or suffering, or as payment for a service or employment.

Public Use

The use of land or property by a government for activities and projects that benefit the general public.

Personal Property

Refers to movable items owned by an individual or a corporation, including furniture, vehicles, electronics, stocks, and intellectual property, as opposed to real property like land or buildings.

Real Property

Refers to land and anything permanently attached to it, such as buildings, in contrast to personal property.