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.

---

Definitions:

Declaration Date

The Declaration Date is the date on which a company's board of directors announces its next dividend payment, specifying the dividend's size, ex-dividend date, and payment date.

Dividend

A portion of a company's earnings that is paid to shareholders, usually on a quarterly basis, as a reward for owning the stock.

Liability

A company's financial debt or obligations that arise during the course of its business operations, required to be settled over time.