What Happens When a Company Ties Manager Compensation to the Company's

What happens when a company ties manager compensation to the company's stock performance?

A) It creates a significant amount of risk because of a lack of diversity since the performance indicator is based on just one stock - that of the company.
B) It has the risk that a company's stock can fluctuate widely based on factors over which the manager has no control.
C) It is accomplished through issuing stock options which shields some of risk.
D) All of the answers are correct.

Correct Answer:

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