Critics of stock options as a form of compensation argue that stock options encourage managers to cater to Wall Street's short-term earnings expectations.

Question

Quizplus · Accepted Answer

Stock options typically have a vesting period and an expiration date, incentivizing managers to focus on short-term performance to boost the stock price and their own compensation. This can lead to decisions and actions that prioritize short-term gains over long-term growth and stability.

Critics of Stock Options as a Form of Compensation Argue