ESOs often are granted to managers in growth and innovative industries to induce more risk-taking.

Question

Quizplus · Accepted Answer

ESOs (Employee Stock Options) are often granted to managers in growth and innovative industries to encourage them to take more risks and contribute to the company's success. By granting these options, companies can align the interests of managers and employees with those of the shareholders, thereby promoting a long-term perspective and commitment to the company's growth. This is particularly true for startups and technology firms, where employees have a strong incentive to work hard and contribute to the company's growth, as their own financial rewards are tied to the company's success.

ESOs Often Are Granted to Managers in Growth and Innovative