Which of the following is normally seen as an advantage associated with long-term incentives plans?
A) They may encourage a better understanding of the business.
B) They tie rewards to the company's ability to pay.
C) They usually dilute shareholder equity for existing shareholders.
D) Goals are easy to determine,particularly in dynamic industries.

Question

Quizplus · Accepted Answer

Long-term incentives plans typically provide a deeper understanding of the business and its long-term goals to employees, helping to align their efforts with those of the company.

Answer: B 
 Long-term incentives plans can help align employee and shareholder interests since rewards are tied to the company's ability to perform well and generate profits.

Answer: C 
 Long-term incentives plans may dilute existing shareholder equity if the company grants additional stock or options to executives or employees, which can reduce the value of existing shares.

Answer: D 
 Goals for long-term incentive plans can be challenging to determine, especially in dynamic industries where market conditions and company performance can fluctuate rapidly.

Which of the Following Is Normally Seen as an Advantage