Sentence Correction

Since 1986 when the Department of Labor began to allow investment officers’ fees to be based on how the funds they manage perform, several corporations began paying their investment advisers a small basic fee, with a contract promising higher fees if the managers perform well.
(A) investment officers’ fees to be based on how the funds they manage perform, several corporations began
(B) investment officers’ fees to be based on the performance of the funds they manage, several corporations began
(C) that fees of investment officers be based on how the funds they manage perform, several corporations have begun.
(D) fees of investment officers to be based on the performance of the funds they manage, several corporations have begun
(E) that investment officers' fees be based on the performance of the funds they manage, several corporations began

[spoiler]OA: D
IMO C should be the answer. As 'allow' introduces subjunctive, so 'that' and 'be' should be used together, which C does.
Please explain.[/spoiler]

I picked (D).

I don't see the need to use subjunctive here. I don't even see the need to use 'that'.

The sentence needs to talk about investment officers before the usage of 'they'.

The department has "allowed" not "proposed", so it should not be subjunctive. IMO 'D'

MGMAT SC guide says 'allow' falls under command subjunctive.
allow: Verbs that take ONLY the infinitive.
So, the usage is: allow...TO BE...

So, I was right partly, but not completely.
It is a subjunctive usage, but should take infinitive.