A number of research articles provide evidence that for growth firms, a higher proportion of executive compensation is based on share prices rather than net income. Which of the following provides the best explanation for this research finding? A) Rapidly growing firms are low-risk firms. B) Accounting recognition lag is high for growth firms. C) Share prices provide more precise performance measures for growth firms than does net income. D) Net income is smooth for growth firms.

A number of research articles provide evidence that for growth firms, a higher proportion of executive compensation is based on share prices rather than net income. Which of the following provides the best explanation for this research finding? A) Rapidly growing firms are low-risk firms. B) Accounting recognition lag is high for growth firms. Share prices provide more precise performance measures for growth firms than does net income. D) Net income is smooth for growth firms