Stock options attempt to align managers' and owners' interests by tying managerial pay and firm performance together.

Name: Stock options attempt to align managers' and owners' interests by tying managerial pay and firm performance together.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Stock options provide managers the right to purchase company stock at a set price, giving them an incentive to increase the company's stock price and ultimately benefit shareholders as well. This aligns managers' interests with those of the owners.

Stock Options Attempt to Align Managers' and Owners' Interests by Tying