Question

German executives are not dedicated to the maximization of shareholder value to the degree that is the case for executives in the United Kingdom and the United States largely because:
a. of the focus on stewardship-management in German firms rather than the financial performance focus of U.S. firms.
b. large institutional investors control large blocks of stock.
c. private shareholders and large institutional investors rarely have large ownership positions in firms. d. the roles of CEO and chairperson of the board of directors are usually combined.

Answer 1

Answer:

(C) private shareholders and large institutional investors rarely have large ownership positions in firms

Explanation:

German executives differ greatly from UK and US ones since private shareholders have limited rights compared to those who held stakes in the United States and United Kingdom. Additionally, executives from the two countries are paid in equity (shares in the company) as part of their compensation, which causes them to have more interest in ensuring shareholders value (since they are one of them). This type of compensation does not happen in most German companies.