10 . The board of directors of Camcell , Inc . , wishes to design a CEO compensation plan that will align the personal interests of the CEO with the interests of the shareholders in long - term firm performance . The board wishes the CEO to take more short - term risk's in order to achieve potentially higher long - term returns . Consequently , the board has decided on an incentive plan that involves payout based on the firm's performance five years in the future . Camcell is presently searching for a new CEO . Which of the following statements is true ?" a . This plan will be very attractive in luring candidates for the CEO position . b. CannCell may have to over - compensate its CEO in order to offset the personal risk a CEO would undertake under this plan . C . Institutional investors disapprove of long-term executive incentive plans and they May sell their blocks of stock in Camcell . d . This type of plan is likely to cause the CEO to underinvest in R&D in order to boost Cam Cell's long - term profitability* 11 . How is each of the three internal governance mechanisms - Ownership concentration , boards of directors , and executive compensation - used to align the interests of managerial agents with those of the film's owner's !"