Question

Consulting firms and human resource departments have spent innumerable hours attempting to develop executive compensation programs that vwill align the goals of a firm's managers with those of the fim's shareholders. which the follawing compensation packages is most likely to accomplish this task? 1) An annual salary of $500,000 and a stock option bonus package that provides 100,000 shares after one year 2) An annual salary of $500,000 and a stock option bonus package for a total of 250,000 shares, with 50,000 shares vesting at the end of each of the next five years 3) An annual salary of $250,000 and a stock option bonus package that provides 250,000 shares after five years 4) An annual salary of $800,000

Answer 1

Answer:

2) An annual salary of $500,000 and a stock option bonus package for a total of 250,000 shares, with 50,000 shares vesting at the end of each of the next five years

Explanation:

As per the given options, the second option is most likely selected for achieving the task as it aligned the goal of the management with the goal of the firm. Also if there is a good salary than it is sufficient for taking care of the short term needs of an employee also the employee do his best for better the share price so that the company and the employee get the benefit in the long term

Therefore the second option is correct