The principal reason guiding executive stock options as an incentive is for senior managers to have a significant stake in the success of a business.

Question

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Executive stock options provide senior managers with a vested interest in the performance of the company, which aligns their goals with the interests of the shareholders. This incentivizes them to make decisions that will benefit the company in the long run, ultimately leading to increased profitability and shareholder value.

The Principal Reason Guiding Executive Stock Options as an Incentive