For the past $40$ years, companies have attempted to attract, retain, and encourage managers by developing attractive compensation packages. These

compensation packages have also been intended to reduce potential agency conflicts between these managers and the firm's shareholders.

In the best interest of shareholders, compensation packages should be structured in a way such that managers have an incentive to maximize the

value of the company's common stock price.

Great Fortunes Baking Company's stockholders are mostly individual investors, and there is relatively little institutional ownership. If several pension

and mutual funds were to take large positions in Great Fortunes Baking Company's stock, direct shareholder intervention would be

likely to

motivate the firm's management.