Which of the following is an example of aligning managers' personal interests with those of the owners?
A)Allow the managers to have as many perks as they request.
B)Pay the managers high salaries.
C)Offer the managers an equity stake in the firm.
D)Trust the managers' actions as they will always act in the owners' best interest.

Question

Quizplus · Accepted Answer

Offering the managers an equity stake in the firm aligns their personal interests with those of the owners, as they have a direct financial incentive to work towards the success of the firm. Choices A and B do not necessarily align their interests with the owners and choice D is not a reliable strategy as managers may not always act in the owners' best interest.

Which of the Following Is an Example of Aligning Managers