Addressing Executive Compensation Concerns

As part of its annual proxy statement, a large publicly traded company, Global Tech Corp, discloses its executive compensation practices to its shareholders. The disclosed compensation package includes a mix of base salary, performance bonuses, stock options, and restricted stock units (RSUs). During the annual general meeting, a shareholder questions whether the compensation structure appropriately aligns the interests of executives with those of the shareholders. The shareholder expresses concern that the performance targets for executive bonuses are not sufficiently challenging and that the granting of stock options may lead to excessive risk-taking.

In response, the company’s management team highlights that their executive compensation is designed to be competitive within the industry and incentivizes long-term value creation. They emphasize that a substantial portion of the total compensation is tied to performance metrics that reflect both financial and non-financial objectives.

What can the management team do to alleviate the shareholder's concerns regarding the executive compensation structure?