Which of the following forms of manager compensation most likely encourages managers to take a long-term view of how their performance ties in with the long-term goals of a company?
A) Year-end cash bonus
B) Base salary
C) Stock options
D) Use of a company car

Question

Quizplus · Accepted Answer

Stock options are a form of compensation that gives managers the right to buy company stock at a set price, typically below the market price. This incentivizes managers to work towards long-term goals because the value of the stock options will increase if the company performs well over an extended period of time. This aligns the interests of the manager with those of the company and encourages them to think long-term rather than focusing on short-term gains that may not be sustainable.

Which of the Following Forms of Manager Compensation Most Likely