Asked by Nathan Gerlach on Jun 20, 2024
Verified
To avoid short-termism, the board of a company should:
A) ensure that the CEO's pay is tied to achieving innovation and efficiency.
B) focus entirely on quarterly earnings.
C) focus on immediate pay-offs on investments.
D) avoid ownership-based governance.
CEO's Pay
The compensation package awarded to the chief executive officer of a corporation, including salary, bonuses, and stock options.
Short-termism
A focus on short-term results at the expense of long-term interests.
Quarterly Earnings
A company's profit or earnings report issued every quarter, reflecting its financial performance over a three-month period.
- Acquire knowledge on bypassing short-termism to ensure the long-term growth of a corporation.
Verified Answer
DG
Danielle GauseJun 21, 2024
Final Answer :
A
Explanation :
Tying the CEO's pay to long-term goals like innovation and efficiency helps align their interests with the long-term success of the company, avoiding short-termism.
Learning Objectives
- Acquire knowledge on bypassing short-termism to ensure the long-term growth of a corporation.
Related questions
Which of the Following Companies Is Most Likely Gravitating Toward ...
One Way to Make Boards Orient More Around a Long-Term ...
Unlike Institutional Investors, Analysts on Wall Street ...
Unlike Analysts on Wall Street, Institutional Investors ...
With Inattention,an Entrepreneur Becomes Sidetracked from the Core Business