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Stockholder and manager conflicts Executive compensation packages often tie performance to bonus and incentive awards, supplemental retirement packages, perquisites, and severance pay, in order to
Stockholder and manager conflicts
Executive compensation packages often tie performance to bonus and incentive awards, supplemental retirement packages, perquisites, and severance pay, in order to encourage the management team to align their performance with organizational goals.
Executives are often compensated above and beyond their salary and benefits. Which of the following perquisites would not encourage managers to maximize longrun shareholder wealth?
Stock options
A percentage of the company's profits
The use of a private jet
Vision Tech is a software company based out of San Francisco. Its stockholders are mostly institutional investors and there is relatively little individual ownership. If these institutions dilute their positions and sell off their stake in Vision Tech's stock to several individual investors, would direct shareholder intervention be more or less likely to motivate the firm's management?
More likely
Less likely
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