The stock option form of bonus payments to managers usually:
A)Motivates well even in extended market downturns.
B)Can lose some motivation because of the delay in reward.
C)Focuses on the short-term.
D)Is not consistent with shareholder interests.
E)Has less risk than other types of bonus payment plans.

Question

Quizplus · Accepted Answer

Stock option plans can lose some motivation because the reward is delayed. The value of the stock may also decrease, decreasing the value of the option. Therefore, managers may not see as much of a benefit as they would with other types of bonus payments.

The Stock Option Form of Bonus Payments to Managers Usually