Which of the following ensures that managers are rewarded only when a company performs better than its competitors?
A) A constant strike price for executive stock options
B) A strike price that increases with time
C) A strike price that changes in line with an index of stock prices
D) A strike price that is tied to reported profit

Question

Quizplus · Accepted Answer

If an option is initially at the money and the strike price increases in line with an index,the company must outperform the index for the option to move in the money

Which of the Following Ensures That Managers Are Rewarded Only