Which of the following statements about managers' compensation is true? a. High salaries motivate managers to increase stockholders' wealth. b. Awarding managers stock options on a monthly basis instead of yearly keeps stock prices high. c. Basing managers' compensation on intrinsic value, not market price, will lead to constant increases in stock price. d. Yearly changes in compensation policies keep managers alert to differences in stock prices. e. Rewarding managers for stock performance over the long run gives them an incentive to keep the stock price high over time.
Which of the following statements about managers' compensation is true? a. High salaries motivate managers to increase stockholders' wealth. b. Awarding managers stock options on a monthly basis instead of yearly keeps stock prices high. c. Basing managers' compensation on intrinsic value, not market price, will lead to constant increases in stock price. d. Yearly changes in compensation policies keep managers alert to differences in stock prices. e. Rewarding managers for stock performance over the long run gives them an incentive to keep the stock price high over time.
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
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Transcribed Image Text:Which of the following statements about managers' compensation is true?
a. High salaries motivate managers to increase stockholders' wealth.
b. Awarding managers stock options on a monthly basis instead of yearly keeps stock prices high.
c. Basing managers' compensation on intrinsic value, not market price, will lead to constant increases in stock price.
d. Yearly changes in compensation policies keep managers alert to differences in stock prices.
e. Rewarding managers for stock performance over the long run gives them an incentive to keep the stock price high over time.
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