A manager receiving a deferred reward is less likely to invest in new technology because of the impact on earnings of the company of such an investment.

Question

Quizplus · Accepted Answer

Deferred rewards, such as stock options or bonuses based on long-term performance, align the manager's interests with the company's long-term success. Investing in new technology, despite its initial impact on earnings, can enhance long-term performance and profitability, thus benefiting both the company and the manager with deferred rewards.

A Manager Receiving a Deferred Reward Is Less Likely to Invest