Analysis Intermediate: Weighing Management Quality

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1.
To learn about a prospective company, stock analysts might interview _______.
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All of the above. An analyst might interview all of them, and others as well, such as suppliers.
2.
How much money the company pays its CEO and top management is _______.
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An important sign of how the company has set up its incentive system. The compensation of top corporate officers is a touchy subject, mostly because a lot of corporate officers are paid a great deal of money. We dont have any hard and fast rules for determining how much is "too much," but at the extremes, executive pay can eat up a significant chunk of corporate profits, which eats directly into shareholder returns.
3.
Which of the following signs may indicate that company directors are motivated to look out for the firms long-term interests?
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They own many shares of the company. If a director has a significant stake (in terms of his or her personal wealth) in the shares of the firm, we think this is the best sign that he or she will look out for the long-term interests of the firm.
4.
Another term for fiduciary responsibility, according to Philip Fisher, is trusteeship.
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True. Fisher described the qualities he looks for in managers as trusteeship.
5.
Whom does the board of directors of a company represent?
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The shareholders. The board is elected by the shareholders and technically represents them.