Question

Isidore Crocker, CEO of Gotham Engines, is strongly in favor of acquiring Carolina Textiles, a firm in an unrelated industry. Some members of the board of directors are questioning Crocker's motives for the acquisition. They argue that it is not uncommon for CEOs to push for acquisitions because________________.

Answer 1

The correct answer is higher CEO pay is related to larger organization size.

Step-by-step explanation:

Obviously, in a business acquisition process, the benefits that the CEO may perceive play a very important role. These decisions generally produce conflicts between the directors and the shareholders, since the latter invest large sums of money in order to receive increasing profits, and a decision like these can negatively impact the result of the new company.