In the case, I think employees are a long-term investment.

Which they can provide more efficient work

force for the company and so; having executive salary and bonuses could impact company’s operation in
both capital and labor. Also motivating employees are one of the business management goals to
promote competence and pro activeness within the company. Which helps to improve sales and
production in the organization. That is why company’s should invest more on motivating employees
because they are the lifeline of any businesses and they play a bigger part in the organization and it
mitigates problems between senior executive and shareholders through shared coordination towards
reaching common goal rather than personal interest.

The best thing that you can offer to employees is by determining whether what motivates them to
work. The above scenario is very evident that monitoring executive performance was a perfect choice
to improve operations performance and generate sales. With that, I can say that cash compensation
might be an acceptable offer for the managers to feel secured and motivated in doing their job. Why?
Because Incentives requires them more effort or pressure just to gain money where in fact, they are
already giving tough effort in handling the company's daily operation. With that, Incentives might
make them act in ways that will only benefit them by mere compliance rather than foreseeing
company's future. On the other hand, cash compensation gives them stability that they are being paid
justly as per their nature of work that pushes them to do their responsibility accordingly. Therefore, it
mitigates problem between senior executives and shareholders through shared coordination towards
reaching common goal rather than personal interest.

In this context, employees constitute a long-term investment.in fact. As a result, executive salaries and
bonuses may have an impact on the company's capital and labor operations. One of the business
management aims is to motivate personnel to increase competence and proactivity within the
organization. This aids in the improvement of the company's sales and output. That is why organizations
should place a greater emphasis on motivating employees because they are the lifeblood of any firm
and play a larger role in the organization. This reduces conflicts amongst corporate executives and
shareholders by focusing on a common purpose and instead of selfish enrichment.
In order to align interest of managers with equity owners often allege that maximizing shareholders
wealth focuses on short-term payoffs, sometimes to the detriment of long-term profits. However, the
evidence suggests just the opposite. Shareholder wealth maximization also reflects dynamic changes in
the information available to the public about future cashflows. And thus, it mitigates agency problems to
senior executives and shareholders.

To match managers interests with those of equity owners, it's common to claim that maximizing
shareholders wealth focuses on short-term payoffs, often at the expense of long-term gains. The
evidence, on the other hand, supports the direct opposite. However, having a performance basis can
assist an organization's productivity and provide quality service. Shareholder wealth maximization also
considers dynamic changes in the public's knowledge of future cashflows. and it is important for the
organization to implement contingency plans to mitigate the problem. As a result, it helps senior
executives and shareholders deal with agency issues.