Question: 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

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?

Step by Step Solution

3.43 Rating (175 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

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

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

324-B-C-F-O (234).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!