Donald, the CEO of a multinational organization, is given a reward by the organization in the form of a contract that allows him to purchase 5 percent shares of the company anytime in the future at a predetermined price. Three years later, Donald purchases those shares at half their market price. Additionally, he becomes more motivated to work toward increasing the performance of the organization. In this scenario, Donald is given a _____.

Question

Quizplus · Accepted Answer

The scenario describes a stock-option plan, which allows employees to purchase a specific number of shares of the company at a predetermined price, often lower than the market value, at a future date. This is aimed at motivating employees like Donald to work towards improving the company's performance.

Donald, the CEO of a Multinational Organization, Is Given a Reward