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You are writing a memo about how your firms management compensation package can impact the future performance of the firm and you learn that the

You are writing a memo about how your firms management compensation package can impact the future performance of the firm and you learn that the firms managers compensated is tied to the firms profitability (ROE). How does this form of compensation impact your expectations about the firms future performance (positive or negative factor)? Would you recommend a change for this firm in the way they compensate management? Explain!

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