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Making Decisions Wexly is a large publicly owned corporation which you are the president. When making...

Making Decisions

Wexly is a large publicly owned corporation which you are the president. When making decisions, do you make them to maximize stockholders’ wealth or for your personal gains? What actions could stockholders take to make sure the interest of both parties is served? What can influence management’s action?

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When making decisions, we as the management should take decisions to maximize the shareholder's wealth as they are the ultimate owners of the firm and they are the ones who have indirectly hired us. Shareholders can tie the president's compensation with the performance of the company by giving stock options as a portion of the incentive payment to align the interests of both the parties. This will influence the management to take decisions which maximize shareholders' wealth as now they will also be shareholders.

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