Stock options are a form of compensation that is mainly used to attract potential employees and for the retainment of existing employees. Stock options are offered to potential employees as an incentive to increase the possibility of purchasing shares of the firm at a discount rather than purchasing shares at the going market price. Some of the problems with stock options as a form of compensation are tax implications for employees, costly dilution, difficulty in valuation, and giving members of the large executive numbers of payments, among others.
Briefly describe the use of stock options in a compensation plan. What are some potential problems with stock options as a form of compensation?
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Academic.Tips. (2023) 'Briefly describe the use of stock options in a compensation plan. What are some potential problems with stock options as a form of compensation'. 11 March.
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Academic.Tips. (2023, March 11). Briefly describe the use of stock options in a compensation plan. What are some potential problems with stock options as a form of compensation? https://academic.tips/question/briefly-describe-the-use-of-stock-options-in-a-compensation-plan-what-are-some-potential-problems-with-stock-options-as-a-form-of-compensation/
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Academic.Tips. 2023. "Briefly describe the use of stock options in a compensation plan. What are some potential problems with stock options as a form of compensation?" March 11, 2023. https://academic.tips/question/briefly-describe-the-use-of-stock-options-in-a-compensation-plan-what-are-some-potential-problems-with-stock-options-as-a-form-of-compensation/.
1. Academic.Tips. "Briefly describe the use of stock options in a compensation plan. What are some potential problems with stock options as a form of compensation?" March 11, 2023. https://academic.tips/question/briefly-describe-the-use-of-stock-options-in-a-compensation-plan-what-are-some-potential-problems-with-stock-options-as-a-form-of-compensation/.
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Academic.Tips. "Briefly describe the use of stock options in a compensation plan. What are some potential problems with stock options as a form of compensation?" March 11, 2023. https://academic.tips/question/briefly-describe-the-use-of-stock-options-in-a-compensation-plan-what-are-some-potential-problems-with-stock-options-as-a-form-of-compensation/.
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"Briefly describe the use of stock options in a compensation plan. What are some potential problems with stock options as a form of compensation?" Academic.Tips, 11 Mar. 2023, academic.tips/question/briefly-describe-the-use-of-stock-options-in-a-compensation-plan-what-are-some-potential-problems-with-stock-options-as-a-form-of-compensation/.
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