Which of the following is a disadvantage of income-based compensation for managers?
A)It reduces operating profits in the long run.
B)It affects the economic stability of the company.
C)It discourages cost efficiency.
D)It encourages dysfunctional behavior.

Question

Quizplus · Accepted Answer

Income-based compensation can encourage managers to prioritize short-term gains over long-term success, leading to unethical or dysfunctional behavior in order to boost their own earnings.

Which of the Following Is a Disadvantage of Income-Based Compensation