💡 When executive compensation is tied to the organization's financial results, there is a risk that executives may prioritize short-term financial performance over long-term sustainability or ethical considerations. This can lead to decisions or behaviors that are inconsistent with the interests of stakeholders, such as: Manipulating financial results: Executives may engage in practices like inflating revenues or underreporting expenses to meet financial targets. Neglecting stakeholder interests: Decisions may focus solely on financial metrics, potentially ignoring the needs of employees, customers, or the community. Encouraging unethical behavior: Employees may feel pressured to meet unrealistic financial goals, leading to unethical practices.