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Compare view points.?
"Stock option grants are good because they motivate executive to acct in the best interests of shareholders.”
“Granting stock option to executives is like allowing a professional footballer to bet on the outcome of games.”
compare these 2 view point.
1 Answer
- DonaldLv 46 years agoFavorite Answer
They're both true. There's no difference in the two statements.
Yes, stock options act as an incentive to the executive to cause the price of shares to rise, therefore (presumably, though I don't fully agree) acting in the best interests of the shareholders.
Yes, stock options are like allowing a professional footballer to bet on the outcome of games--with the caveat that the footballer is betting on his team winning. This gives the player the incentive to perform his best, run up the score, and win.
Working to increase the share price...scoring or helping your team score...winning in the marketplace...winning in the field...financial incentives for a rising price...financial incentives for a high score...options become worthless if the executive fails...bet becomes worthless is the team loses.
There's no difference except stock options are legal and an athlete betting on the outcome of games is illegal.
Hope that helps.