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Which package is likely to be better from the point of view

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Question - A company's board of directors must choose between two alternative compensation packages for top executives. Package 1 includes a fixed salary and an yearly bonus that depends on profit on that year. For example, the CEO gets paid a bonus if profits are higher than a certain target. Package 2 includes a fixed salary and a certain amount of stock in the company. Which package is likely to be better from the point of view of shareholder value maximization?

Reference no: EM133126317

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