Which one of the following is most apt to align management's priorities with shareholders' interests?
A) Increasing employee retirement benefits
B) Compensating managers with shares of stock that must be held for 3 years before the shares can be sold
C) Allowing a manager to decorate his or her own office once he or she has been in that office for a period of 3 years or more
D) Increasing the number of paid holidays that long-term employees are entitled to receive
E) Allowing employees to retire early with full retirement benefits

Question

Quizplus · Accepted Answer

Compensating managers with shares of stock that must be held for a certain period before selling aligns their interests with shareholders as they will be incentivized to work towards increasing the stock price in the long-term as their own financial gain would depend on it. Increasing employee retirement benefits, increasing the number of paid holidays, and allowing employees to retire early with full benefits may increase employee satisfaction but do not necessarily align with shareholder interests. Allowing a manager to decorate their own office after a certain period has no direct correlation with shareholder interests.

Which One of the Following Is Most Apt to Align