Much of the Outcry in the 2008 Fight Over a Fat

Multiple Choice

Much of the outcry in the 2008 fight over a fat bailout for Wall Street focused on the size of Wall Street's fat paychecks. The real problem, according to corporate governance researchers, isn't the amount executives receive, it's how companies pay them. Most companies link compensation to quarterly performance, encouraging short-term gambles. One way to align pay with long-term incentives and discourage risky bets would be to stretch compensation over more years. What is a suggested solution to the principal-agent problem?

A) Employee ownership
B) Employee incentive pay
C) Employee long-term contracts
D) Employee monitoring