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Company's pension fund performance

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1). The manager of the company's pension fund is compensated based entirely on fund performance; he earned $1.2 million last year. As a result, the fund is contemplating a proposal to cap the compensation of fund managers at $100,000. Provide an argument against the proposal.

2). Donut Ville caters to its retirement populations by selling over 10,000 each week. To produce that many donuts weekly, Donut Ville uses 1,000 pounds of flour, which must be delivered by 5:00 am by every Friday morning. How should the manager of Donut Ville acquire flour? Explain.

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1).The manager of the company's pension fund is compensated based entirely on fund performance; he earned $1.2million last year. As a result, the fund is contemplating a proposal to cap the compensation of fund managers at $100,000. Provide an argument against the proposal.

The argument against the proposal is that the manager of the company's pension fund uses special skills, vigilance, and efforts to ensure that the fund performs well. The motivation is that he will be compensated based on the performance of the fund. The earnings of $1.2 million is a big incentive to ensure that the ...

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