A stock option plan is a compensatory plan if:
A) The employee must have worked for the company for one year.
B) The employee must report the option on the employee's current tax return.
C) The employee must work for the company until retirement.
D) It involves a cost to the grantor.

Question

Quizplus · Accepted Answer

A stock option plan is considered compensatory if it involves a cost to the grantor, as it is intended to compensate employees by providing them with the opportunity to purchase stock at a favorable price.

A Stock Option Plan Is a Compensatory Plan If