If agency problems can be mitigated by tying the manager's compensation to the fortunes of the firm,

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If agency problems can be mitigated by tying the manager's compensation to the fortunes of the firm, why don't firms compensate managers exclusively with shares in the firm?

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Fundamentals of Corporate Finance

ISBN: 978-1259024962

6th Canadian edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim

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Question Posted: Nov 14, 2017 02:09 AM

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If agency problems can be mitigated by tying the manager's compensation to the fortunes of the firm,

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While a compensation plan that depends solely on the firms performance would s...View the full answer

Fundamentals of Corporate Finance

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