Kolese Inc. ,a manufacturing company,includes stock options and stock purchase plans in executive pay.Executives at the company will want to do what is best for Kolese because that will cause the value of the stock to grow.Which of the following is being exemplified in this scenario?
A) Scanlon plan
B) balanced scorecard
C) long-term incentive
D) merit plan
E) short-term incentive

Question

Quizplus · Accepted Answer

The scenario describes the inclusion of stock options and stock purchase plans as part of executive pay, which are both forms of long-term incentives. This aligns the interests of the executives with those of the company and its shareholders, as the executives will want to improve the company's performance to increase the value of the stock and their own compensation.