Employee stock options are designed to:
A) Align employee goals with shareholder goals.
B) Give the company a large tax deduction based on the substantial up-front cost to the employer.
C) Reward employees who leave the firm.
D) Utilize excess cash held by the firm.
E) Be traded on the open market.

Question

Quizplus · Accepted Answer

Employee stock options align employee goals with shareholder goals by giving employees an incentive to increase the company's stock price, which benefits both the employees (through the value of their options) and the shareholders (through the increased value of their shares).

Employee Stock Options Are Designed To