Firms must provide the right incentives if they are to get

$-$Select$-$

to focus on long$-$run value maximization. Conflicts exist between managers and stockholders and between stockholders $($represented by managers$)$ and

$-$Select$-$

$.$ Managers' personal goals may compete with shareholder wealth maximization. However, managers can be motivated to act in their stockholders' best interests through $(1)$ reasonable

$-$Select$-$

packages, $(2)$ firing managers, and $(3)$ the threat of hostile takeovers. If a firm's stock is undervalued, corporate raiders will see it as a bargain and will attempt to capture the firm in a hostile takeover.

$-$Select$-$

generally receive fixed payments regardless of how the firm does, while

$-$Select$-$

earn higher returns when the firm's earnings are higher. Investments in

$-$Select$-$

ventures, that have great payoffs to stockholders if successful but threaten bankruptcy if they fail, create conflicts. In addition, the use of additional

$-$Select$-$

increases stockholder$-$ debtholder conflicts. Consequently, bondholders attempt to protect themselves by including

$-$Select$-$

in bond agreements that limit firms' use of additional

$-$Select$-$

and constrain

$-$Select$-$

actions.