Question: Linking managerial remuneration to entity performance motivates managers to act in the interests of shareholders. However, it also burdens managers with greater risks than they

Linking managerial remuneration to entity performance motivates managers to act in the interests of shareholders. However, it also burdens managers with greater risks than they may like. How do entities balance these two considerations in management remuneration plans?

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Linkingmanagerial remuneration to entity performance motivates managers to act in theinterests of shareholders This is the basis of the agency theory which states thatevery act of the executives binds ... View full answer

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