Executive compensation packages often tie performance to bonus and incentive awards, supplemental retirement packages, perquisites, and severance pay, in order to encourage the management team to align their performance with organizational goals.

Which of the following compensation proposals is most likely to be in the best interest of the company$$s shareholders?

A base salary of $$500,000$ plus perquisites worth $$250,000$

A base salary of $$500,000$ plus a stock option package for $250,000$ shares, with $20\%$ of shares maturing at the end of each of the next five years

A base salary of $$500,000$ plus a stock option package for $250,000$ shares that mature in six months