Giving top management ____ is one method that ensures managers will act in the interest of shareholders in merger decisions.
A) "golden parachute" contracts
B) excellent pay
C) executive perks
D) job security

Question

Quizplus · Accepted Answer

"Golden parachute" contracts provide top management with significant financial compensation if they are terminated after a merger or acquisition. This ensures that they will act in the interest of shareholders because if they make decisions that harm the company, they will face the consequences of losing their job and potential financial compensation. Excellent pay, executive perks, and job security may also motivate managers to act in the interest of shareholders, but may not be as effective as "golden parachute" contracts in ensuring this behavior.

Giving Top Management ____ Is One Method That Ensures Managers