Problem:
Suppose you are a director of an energy company that has three divisions-natural gas, oil, and retail (gas stations). These divisions operate independently from one another, but the division managers all report to the firm's CEO. If you were on the compensation committee as discussed in question 1-16 and your committee was asked to set the compensation for the three division managers, would you use the same criteria as you would use for the firm's CEO? Explain your reasoning. Please provide explanation.