Question 3 The Associated Metals Board had come under criticism because of the high remuneration...
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Question 3 The Associated Metals Board had come under criticism because of the high remuneration that had been paid at a time when profits declined. At the AGM the Chairman announced that the problem had been resolved. The method would be to identify the expected cost and revenue streams associated with each product line and discount the net revenues to estimate the present value and hence the value created. Senior executives would align their efforts with value created and would be rewarded accordingly. A shareholder objected that there would be very little match between executive earnings and value creation for financial, strategic and efficiency reasons. This shareholder sounds knowledgeable. Required: What is the basis for the shareholder's argument on the three grounds? (Total 100 marks)
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