Improving managerial performance or changing their incentive

Reference no: EM13193903

An article in the Wall Street Journal discusses a trend among some large US Corporation to base the compensation of outside members of their boards of directors partly on the performance of the corporation. “This growing practice more closely aligns the director to the company. (Some) companies link certain stock or stock-option grants for directors to improved financial performance, using a measure such as annual return on equity.”

How would such a linkage tend to reduce the agency problems between managers and shareholders as a whole?

Why would directors be more efficient than shareholders at improving managerial performance and changing their incentives?

Reference no: EM13193903

Questions Cloud

Where should the point p be located : the cost of laying pipe is $400,000/km to run pipe over land to a point P on the north bank of the river and then $800,000/km to run pipe under the river to the tanks. where should the point P be located?

Find out the change in entropy of the system : Assume in state A, V=4.00dm&3, p=1.00atm, t=300K, Va=10Vb, Pc/Pb=5 and Cp,m= 7/2R. Determine the change in entropy of the system and the surroundings for each step of the cycle.

The effect of omission have on the estimated sales : Cypress River Landscape Supply is a large wholesale supplier of landscaping materials in Georgia.Cypress River’s sales vary seasonally.

The effectthis omission have on the estimated sales : Cypress River Landscape Supply is a large wholesale supplier of landscaping materials in Georgia.Cypress River’s sales vary seasonally.

Improving managerial performance or changing their incentive : The Wall Street Journal discusses a trend among some large US Corporation to base the compensation of outside members of their boards of directors partly on the performance of the corporation.

How many terminals in the room will be working : A certain university has a computer room with 219 terminals. Each day there is a 3% chance that a given terminal will break and a 70% chance that a given broken terminal will be repaired. In the long run, about how many terminals in the room will ..

The occurrence of the law of supply : The Law of Supply movement along the curve due to the price effect occurs because people can buy only so much of a product.

Evaluate mean differences : Explain why you should use ANOVA instead of several t tests to evaluate mean differences when an experiment consists of three or more treatment conditions.

Explain solution of naoh is concentrated : The procedure uses 3.0M NaOH. However, the student notices that the only solution of NaOH is concentrated (19M ) NaOH solution. How many mL of water are needed to make 500mL of a 3.0M NaOH

User Account

All Pages