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    Aligning the interests of managers and stockholders

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    Which of the following is NOT a goverance mechanism used to align the interests of managers and stockholders?

    (a) Stockholder meetings

    (b) The board of directors

    (c) Stock-based compensation schemes

    (d) The mission statement

    (e) Takeover contraints

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    Answer: (d) The mission statement

    Governance mechanisms are put in place by principals to align agents' incentives with their own, and to monitor and control agents. In this case the principals are the stockholders and the agents are the mangers.

    Mission statement ...

    Solution Summary

    Answers a multiple choice question on aligning the interests of managers and stockholders.