The board of directors of a company determines that senior management should be rewarded in order to achieve the company's objectives. The board of directors determines whether to award bonuses based on growth in share value at the conclusion of each fiscal year. Bonuses will be given in stock, which the managers may keep or sell on the open market. What are the ramifications of instituting a rewards scheme like this?

Computer Networking: A Top-Down Approach (7th Edition)
7th Edition
ISBN:9780133594140
Author:James Kurose, Keith Ross
Publisher:James Kurose, Keith Ross
Chapter1: Computer Networks And The Internet
Section: Chapter Questions
Problem R1RQ: What is the difference between a host and an end system? List several different types of end...
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The board of directors of a company determines that senior management
should be rewarded in order to achieve the company's objectives. The board of
directors determines whether to award bonuses based on growth in share value
at the conclusion of each fiscal year. Bonuses will be given in stock, which the
managers may keep or sell on the open market. What are the ramifications of
instituting a rewards scheme like this?
Transcribed Image Text:The board of directors of a company determines that senior management should be rewarded in order to achieve the company's objectives. The board of directors determines whether to award bonuses based on growth in share value at the conclusion of each fiscal year. Bonuses will be given in stock, which the managers may keep or sell on the open market. What are the ramifications of instituting a rewards scheme like this?
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