chose the correct answer Which of the following is not a way

chose the correct answer

Which of the following is not a way in which shareholders can attempt to overcome agency problems?

1-Incurring costs to monitor managers

2-Paying managers a good salary

3-Relying on market forces to exert managerial discipline

4-Paying the manager a proportion of the profits that the company generates

Solution

Correct Option 4 Paying the manager a proportion of the profits that the company generates.

Above option will bring sense of belongingness to managers in company, they will be penalized for the poor performance and incentivize for the better performance.