The Role of Law in Equity Incentives

Shareholders triggering a revolt or political intervention

Whether it is a partial substitute for close monitoring by shareholders

They are poorly suited to protect the interests of the shareholder majority

<p>Agents will be motivated by conscience, pride, and reputation.</p> Signup and view all the answers

<p>By relying on agents' conscience, pride, and reputation.</p> Signup and view all the answers

<p>Reliance on auditors motivated principally by reputational concerns.</p> Signup and view all the answers

<p>To align the interests of managers with those of shareholders</p> Signup and view all the answers

<p>Equity compensation (e.g., stock options)</p> Signup and view all the answers

<p>By regulating how and when companies can compensate their managers</p> Signup and view all the answers

<p>By aligning the interests of managers with those of shareholders</p> Signup and view all the answers