What is managerial reward maximization?

Managerial reward maximization refers to the strategy where managers prioritize maximizing their own compensation and benefits, often at the expense of shareholder interests or long-term company performance. This behavior can lead to decisions that favor short-term gains or personal perks rather than sustainable growth. Consequently, it may result in misalignment between managerial incentives and the overall goals of the organization. Addressing this issue often involves implementing better governance practices and aligning managerial rewards with the long-term success of the company.