The more owners have access to sensitive performance measures, the more they can rely on incentive compensation for their managers.

Question

Quizplus · Accepted Answer

When owners have access to sensitive performance measures, they can better monitor and evaluate their managers' performance. This allows them to design more effective incentive compensation plans that align managers' interests with the company's goals. As a result, managers are more likely to work hard and make decisions that are in the best interest of the company, ultimately improving overall performance.

The More Owners Have Access to Sensitive Performance Measures, the More