Which of the following are negative consequences of compensating managers with stock?   Question 14 options:   a)  Stock compensation can attenuate management shirking and risk aversion   b)  Stock compensation forces management to bear high levels of firm-specific risk, which cannot be diversified away   c)  Stock compensation allows a risk-averse manager to be assured of a minimum level of pay   d)  Stock compensation is less susceptible to market wide effects outside of management control

Business/Professional Ethics Directors/Executives/Acct
8th Edition
ISBN:9781337485913
Author:BROOKS
Publisher:BROOKS
Chapter1: Ethics Expectations
Section: Chapter Questions
Problem 10.9EC
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Which of the following are negative consequences of compensating managers with stock?

 

Question 14 options:

 

a) 

Stock compensation can attenuate management shirking and risk aversion

 

b) 

Stock compensation forces management to bear high levels of firm-specific risk, which cannot be diversified away

 

c) 

Stock compensation allows a risk-averse manager to be assured of a minimum level of pay

 

d) 

Stock compensation is less susceptible to market wide effects outside of management control

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