Why would directors be more efficient than shareholders

Assignment Help Econometrics

Reference no: EM131116569

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: EM131116569

Questions Cloud

Would you recommend that multiple systems be operated : Military radar and missle detection systems are designed to warn a country of enemy attacks. A reliability question deals with the ability of the detection systen ti identify an attack and issue the warning. What is the probablity that one system wil..

Find the probability of receiving three calls : Telephone calls arrive at a rate of 48 per hour at a reservation desk for Regional Airways. Find the probability of receiving 3 calls in a 5 minute interval. Find the probability of receiving 10 calls in 15 minutes.

Create a Online shopping program : Please use comments throughout the program Point has to be taken into consideration: Object-oriented programming Inheritance, encapsulation, and polymorphism

Franchise agreement require : David Unkar holds a Dunkin' Donuts franchise. The terms of his franchise agreement require him to use only those ingredients furnished by Dunkin' Donuts. He is also required to buy its napkins, cups, and so on, witht the Dunkin' Donuts trademark on t..

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

Define professional boundaries and boundary crossings : What are at least two cultural limitations associated with assessment and treatment? In your response, discuss the use or misuse of assessment instruments, therapy techniques, research results, or any other facet of clinical practice that could ha..

Manufacturing complex comprises several operating units : Shale Oil Company’s Aston, Ohio, manufacturing complex comprises several operating units. These units process the crude oil that is pumped through and transform it into a multitude of hydrocarbon products. Determine the expected shutdown time and the..

Find a recent newspaper or magazine article : Identify in your own words, what part of this article, website or ad appears like pseudopsychology and/or is pseudoscientific. Attach an electronic link to the source so others can read the content too.

Restate in the form of a question : Restate in the form of a question. Use complete sentences.Ms. S is the sole shareholder and chief executive officer of SMJ Corporation. Ms. S's college roommate recently lost her job, is in financial difficulty, and has asked Ms. S for a loan. Ins..

User Account

All Pages