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Which is? false regarding compensation policies - While decreasing? managers' risk? exposure, increasing the sensitivity of managerial pay and wealth to firm performance does have some negative effects

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Which is? false regarding compensation policies

- While decreasing? managers' risk? exposure, increasing the sensitivity of managerial pay and wealth to firm performance does have some negative effects.

- The substantial use of stock and option grants in the 1990s greatly increased? managers' pay−for−performance sensitivity.

- In the absence of? monitoring, the other way the conflict of interest between managers and owners can be mitigated is by closely aligning their interests through the? managers' compensation policy.

- The optimal level of sensitivity of? managers' compensation to the performance of their firms depends on the? managers' level of risk? aversion, which is hard to measure.