Chapter 29.3, Problem 2CC

Summary Introduction

To discuss: The negative consequence for raising the sensitivity of managerial pay to firm performance.

Introduction:

Corporate is a particular legal entity that is separated from its owners. In this form of business, the owners specify certain governing rules to undertake the business in a contract known as the articles of incorporation. The board of directors of a corporate consists of three members who are as follows:

• Gray directors
• Outside directors
• Independent directors

The monetary and non-monetary benefits paid to the employees by the employer for the work done are known as compensation.