A publicly traded corporation, DukeBrands, Inc. (THBI), is trying to design a generous compensation contract for a new CEO, and wants to ensure that the new executive will make decisions in the best interest of shareholders. With this in mind, THBI designed a plan that is weighted very heavily toward stock-based compensation. Specifically, 80% of the new CEOs compensation over the initial five-year contract length consists of restricted shares (which requires the CEO to hold all shares and is not able to trade them until a later date).The notion is that by requiring that the executive to hold a large number of shares, she will naturally make decisions in the best interests of shareholders.

If the total compensation that the THBI executive receives over this five-year period represents a very significant portion of her overall wealth, briefly describe any concerns that you might have about this compensation plan.