Despite the negatives of the options backdating scandal, stock options have beneficial uses. List several appropriate uses of stock options.

Granting stock options to key employees was a popular practice in the dot-cam heyday. Startup companies could offer stock options to employees in the expectation that the options would be worth a great deal if the company took off. Indeed, that proved true for many people in high-tech fields. However, the SEC recognized that stock options were liable to misuse, and in 1992 it imposed a rule requiring companies to report executive stock options in detail.