Share option plans
A)directly award bonuses to employees based on cost savings and increased labour productivity.
B)are illegal in Canada.
C)tend to weaken employee commitment to the organization.
D)give employees the right to purchase company shares at a future date at a predetermined price.
E)give employees the right to purchase company shares at a future date at a predetermined price and tend to weaken employee commitment to the organization.

Question

Quizplus · Accepted Answer

Share option plans give employees the right to purchase company shares at a future date at a predetermined price. They are a common form of employee compensation in many countries and can be used to incentivize employees to work towards the company's success. They do not necessarily weaken employee commitment to the organization, as the employees have a vested interest in the company's success. However, it is important for companies to properly communicate the terms of the share option plan and ensure that employees understand the potential risks and rewards of investing in company stock. Option A is incorrect, as directly awarding bonuses based on cost savings and productivity does not involve share options. Option B is incorrect, as share option plans are legal in Canada. Option C is incorrect, as share option plans can actually increase employee commitment if implemented effectively. Option E is partially correct but unnecessarily negative, as share option plans do not inherently weaken employee commitment.

Share Option Plans