Question: Inside directors of a firm are also executives of the

Inside directors of a firm are also executives of the firm, and they normally receive compensation that includes some form of profit sharing. Outside directors are not employees of the firm. They normally receive some compensation but do not have profit-sharing arrangements. Outside directors are often charged with determining salaries of senior executives. From the shareholders’ point of view, why would it be desirable for outside directors to have this responsibility?


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  • CreatedNovember 13, 2014
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