Why do companies issue options to executives if they cost the company more than they are worth

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Why do companies issue options to executives if they cost the company more than they are worth to the executive? Why not just give cash and split the difference? Wouldn’t that make both the company and the executive better off?

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Corporate Finance

ISBN: 978-0077861759

10th edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe

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Question Posted: Aug 28, 2014 10:29 AM

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Why do companies issue options to executives if they cost the company more than they are worth

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One of the purposes to giving stock options to CEOs instead of cash is to tie the perf...View the full answer

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