Why do you suppose companies offer their employees stock options instead of simply paying higher salaries?

A. Stock options reward the employees only if, the stock appreciates in value. Stock options allow employees to become fully vested shareholders. There can also be tax advantages to options.

B. Stock options reward the employees only if, the stock appreciates in value. Stock options create incentives for employees to work hard in the best interests of the shareholders. There can also be tax advantages to options.

C. Stock options reward the employees whether or not the stock appreciates in value. Stock options create incentives for employees to work hard in the best interests of the shareholders. There can also be tax advantages to options.

D. While companies pay higher employment taxes on the stock options offered to employees, the incentives created for employees to work hard outweigh the higher taxes.

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Solution The answer is Option B Explanation An employee stock option is a st... View the full answer