Answer to Question #225850 in Finance for Anisha Radhika Kum

Question

What are some of the reasons that might motivate a corporate chief executive officer (CEO) not to try to maximise his shareholders’ wealth in relation to the firm’s activities?

Answer 1

Maximizing shareholders' wealth is about increasing the financial status of an organization. In this case, the chief executive officer may want to manage the finance properly, therefore he or will not wish to maximize the wealth of his shareholders. This helps in maintaining proper financial management.