This question has two parts, each worth 5 points. Please clearly label the answers as a. and b. Answers that are not clearly labeled a. and b.

In recent years, more and more corporations have begun implementing Employee Stock Ownership Plans (ESOPs), in which employees are paid partly in shares of stock in the corporation and partly in traditional wages and salaries. Employees at all levels of the corporation, from top-level managers to the lowest-ranking employee, are included in the ESOP.

a. Define the problem that corporations are attempting to solve by implementing ESOPs. Explain why this problem occurs, and why it is particularly likely to be a problem in corporations.

b. Explain whether the ESOP can solve (or at least reduce) the problem you described in part a. "Explain" means state whether the ESOP will or will not solve the problem, and then describe the reason (or reasons) why it will or won't.