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Section 953 of the Dodd-Frank Act requires disclosure that involves a rather complex subject with respect to the relationship between executive compensation actually paid and

Section 953 of the Dodd-Frank Act requires disclosure that involves a rather complex subject with respect to the relationship between executive compensation actually paid and the financial performance of the firm.

Required:

a. Explain how the interest of executives and shareholders can be aligned with respect to executive compensation.

b. Explain why net income as a measure of financial performance can be inappropriate.

c. Explain why it is not advisable to base executive compensation only on share prices.

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