The CFO at Robix has been incentivized with a stock option that can only be exercised after a three-year vesting period. This is known as
A)competitive benchmarking.
B)a golden handcuff.
C)the free-rider effect.
D)rate busting.

Question

Quizplus · Accepted Answer

A stock option that can only be exercised after a vesting period is a form of golden handcuff, which incentivizes the CFO to stay with the company for at least three years in order to reap the benefits of the stock option. Competitive benchmarking refers to comparing the company's performance to that of its competitors, the free-rider effect occurs when individuals benefit from a group's actions without contributing, and rate busting refers to driving down prices in a market.

The CFO at Robix Has Been Incentivized with a Stock