Which of the following mechanisms is not used by shareholders to get managers to act in shareholder's best interests?
A)Threat of firing
B)Managerial compensation.
C)Golden parachute.
D)Threat of takeover.
E)Answers b and c above.

Question

Quizplus · Accepted Answer

Golden parachute is not a mechanism used by shareholders to get managers to act in their best interests. Instead, it is a type of compensation package that may be offered to executives in the event of a merger or acquisition, designed to provide financial security in case they lose their job as a result of the transaction. The other options - threat of firing, managerial compensation, and threat of takeover - are all commonly used methods for shareholders to incentivize managers to act in their best interests.

Which of the Following Mechanisms Is Not Used by Shareholders