Question
Corporate managers work for the owners of the corporation. Consequently, they should make decisions that are in the interests of the owners, rather than in
Corporate managers work for the owners of the corporation. Consequently, they should make decisions that are in the interests of the owners, rather than in their own interests. What strategy is available to shareholders to help ensure that managers are motivated to act this way?
(Choose the correct response.)
A.
Shareholders exercise some control by electing a board of directors.
B.
Managers' compensation contracts are designed to ensure that most decisions in the shareholders' interests are also in the managers' interests.
C.
In some cases the shareholders can pressure the board of directors to oust the CEO if they are unhappy with the CEO's performance.
D.
Corporate raiders may purchase a large fraction of a company's shares in a hostile takeover and replace the board of directors and the CEO in a bid to improve corporate performance.
E.
Some large shareholders are able to exercise direct control by getting elected to the board of directors or appointing a number of directors.
F.
The fact that a corporation's shares are publicly traded encourages managers and boards of directors to act in the interests of their shareholders.
G.
All of the above.
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