Corporate managers work for the owners of the corporation. Consequently, they should make decisions that are in the interests of the owners, rather than in their own interests. What strategies are available to shareholders to help ensure that managers are motivated to act this way? Shareholders can do the following: (Select all the choices that apply.) A. Ensure that employees are paid with company stock and/or stock options. B. Write contracts that ensure that the interests of the managers and shareholders are closely aligned. C. Mount hostile takeovers. D. Ensure that all employees are paid a percentage of the company's revenue E. Ensure that underperforming managers are fired.
Corporate managers work for the owners of the corporation. Consequently, they should make decisions that are in the interests of the owners, rather than in their own interests. What strategies are available to shareholders to help ensure that managers are motivated to act this way? Shareholders can do the following: (Select all the choices that apply.) A. Ensure that employees are paid with company stock and/or stock options. B. Write contracts that ensure that the interests of the managers and shareholders are closely aligned. C. Mount hostile takeovers. D. Ensure that all employees are paid a percentage of the company's revenue E. Ensure that underperforming managers are fired.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:Corporate managers work for the owners of the corporation. Consequently, they should make decisions that are in the interests of the owners, rather than in
their own interests. What strategies are available to shareholders to help ensure that managers are motivated to act this way?
Shareholders can do the following: (Select all the choices that apply.)
A. Ensure that employees are paid with company stock and/or stock options.
B. Write contracts that ensure that the interests of the managers and shareholders are closely aligned.
C. Mount hostile takeovers.
D. Ensure that all employees are paid a percentage of the company's revenue
E. Ensure that underperforming managers are fired.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education