Question

In addition to an annual base salary of $1.3 million, Heather Bresch, CEO of Mylan Pharmaceuticals, also received 6.4 million USD in other compensation. This included $19,200 for the use of a company car and $310,000 in personal use of the company jet. Which of the following statements is most true regarding this situation?
a. Top level managers always act in the shareholder interest.
b. Shareholders favor diversification.
c. Top level managers may pursue their own interests over that of the company.
d. Executives favor diversification.

Answer 1

Answer: C. Top level managers may pursue their own interests over that of the company.

Explanation:

The scenario given in the question explains that top level managers may pursue their own interests over that of the company.

In the case of sole proprietorship or partnership business, the revenue generated by the firm or the profit made belongs to the owners. In the case of of a Corporation, this isn't the case as the revenue should be used for Shareholders benefits. Sometimes, there may be a conflict of interest which may then bring about a situation whereby the top level managers pursue their own interests over that of the company.

Hence, the correct option is C.