it becomes difficult to discipline poorly performing managers at the end of their
career. Young managers have lucrative future job opportunities both inside and
outside the firm as an incentive for hard work and honest dealings with their
current employer. Older managers enjoy no such future opportunities and face
correspondingly weaker incentives for hard work and honest dealing. Like any
such problem involving managerial myopia, most firms deal with the end-of-game
problem by insisting that senior managers take a significant portion of total
compensation in the form of pay tied to long-term stock-price appreciation.
X.ACCOUNTING INFORMATION PROBLEMS ...
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