To reduce Agency problems, executive compensation should be ...

[Kikoku]

To reduce Agency problems, executive compensation should be designed to
 a. be paid baased on quarterly sales
  b. create incentives so that managers act like owners of the firm
  c. avoid making the executives own shares in the company
 d. be an increasing function of the firm's expenses
 e. all of the above

Question 2

If a firm decides to stop its sales agents from pricing too aggressively to make sales by requiring the agent to obtain permission to reduce price below a specific threshold, and the manager only has one source of information, the sales agent, the solution would
 a. Work
 b. Not work
 c. Work in all circumstances
  d. None of the above

[potomatos]

Answer to Question 1

b

Answer to Question 2

b

[Kikoku]

Gracias!

[alexanderhamilton]

Excellent