O 1 75% AT&T LTE 11:52 AM Exit 1:08 Which of the following statements is FALSE? During the 1990s, most companies adopted compensation policies that more directly gave managers an ownership stake by...

Extracted text: O 1 75% AT&T LTE 11:52 AM Exit 1:08 Which of the following statements is FALSE? During the 1990s, most companies adopted compensation policies that more directly gave managers an ownership stake by including grants of stock or stock options to executives. Stock and option grants give managers an incentive to increase the stock price to make their stock or options as valuable as possible. By tying compensation to performance, shareholders aim to prevent/reduce agency problems. Increasing the pay-for-performance sensitivity comes with the added benefit of reducing manager's risk.