D Question 14 1 pts The chart below, from the Financial Times, plots the year-to-date percentage change in the share prices of several major technology companies. Shares of big tech companies have hit "air pockets' Year-to-date performance (") - Meta - Netflix - Spotify : - PayPal 10 More than $200bn was shaved off the value of the Facebook owner 0 -10 -20 Netflix shares suffered their biggest one-day loss in nearly a decade -30 -40 Jan 3 2022 Jan 10 2022 Jan 24 2022 Jan 31 2022 Source: Bloomberg OFT Why is share price a better financial measure for evaluating and rewarding the performance of senior executives than the performance of front-line or entry-level employees? Because issues of goal incongruence only arise between senior executives and firm shareholders, Entry-level workers are not self-interested, and as such, do not need to be subject to firms' control systems. Because, while senior executives have a good understanding of how financial markets work, front-line staff do not know how to interpret and respond to changes in the firm's share price. Senior executives are more risk-seeking and front-line staff are more risk-averse. Because of this, the former does not need to be compensated as heavily to take on the risk that arises when one is evaluated and rewarded using the firm's share price. Because, while senior executives make strategic and operational decisions that can drastically and promptly impact firm value, individual workers' decisions and actions, in isolation, are simply not consequential enough to affect the firm's share price