1. A company has made profits for the last 3 years but has not paid any dividends to shareholders. The share price of the company has been increasing during this period for about 30% while the general market index has made 40%. As the board of directors and management agreed for a target of 20% shareholders wealth growth during the period, the management team believed that they would get bonus for their performance. During the period, the management team also bought a luxury jet for their business trips which saved them time comparing with using commercial airlines. They also avoided investing in deemed risky projects because they believe that the company should be better in safe position. They also acquired three start-up companies but leave them not operating because they believe that beating potential competitors at start-up stage could also be a good strategy. They invested a lot in research and development activities but so far not yet had any new products been invented.

Required:

- Comment on the performance of the management in relation to the corporate goal of the firm.