Assuming they are awarded ethically and within the law, stock options are often touted as the...

Assuming they are awarded ethically and within the law, stock options are often touted as the perfect “alignment” mechanism for management incentives.

a) Why is that?

b) In the case of a multi-division corporation, sometimes “phantom stock” or options of phantom stock, will be issued in order to create a tangible measure of the performance of a specific division of the company. If you were trying to set a value for the phantom stock, how might you do it?

Expert Solution

a) Many times , it offers pay differences among employees working to different levels. Generally, top executives will get huge some even the business will perform to average outcomes. It may raise to an inferiority complex to middle and operational level managers and employees due to many behavioral aspects of the workplace and corporate settings.

b) I will analyze the legal provisions related to Phantom stock and then frame it to those employees who wish to work as per the long term contractual offers of my organization. We shall also adopt certain bonds which will act as a security if an employee leaves in a hurry . My aim will be to stop the loss incurred to my business by offering Phantom stocks to certain groups of employees.

People working at top level management of the organization will be assigned to certain ethical and value based goals to be achieved along with monetary goals then they will be allocated to certain Phantom stocks.

keosha answered 1 month ago

Assume that you, as an STI employee, were awarded options on 1,000 shares of STI stock...

Assume that you, as an STI employee, were awarded options on 1,000 shares of STI stock today at the current market price. Without doing a detailed numerical calculation, make your best-guess estimate as to the economic value of this option grant. What factors did you consider in making your estimate? Would this option grant likely affect any of your behaviors? If so, how?

1. Stock options are often a part of a senior executive’s compensation, but not a part...

1. Stock options are often a part of a senior executive’s compensation, but not a part of the compensation for a regular worker. Please explain why stock options might not be an attractive incentive for regular workers of a firm.

Managerial compensation packages often include stock options with the goal of aligning managers’ incentives with those...

Managerial compensation packages often include stock options with the goal of aligning managers’ incentives with those of the shareholders. These call options give the manager the right, but not the obligation to purchase shares at the strike price on or before a certain maturity date. Discuss two different possible complications that might arise with certain options (think about option’s maturity and the “moneyness” of the option).

Stock quotes Smith Enterprises recently was profiled on a financial information website and touted as a...

Stock quotes Smith Enterprises recently was profiled on a financial information website and touted as a "hot" growth stock. You acquired the stock quote shown here from that website. Smith Enterprises (NYSE: SME) Last Trade: 51.63 Day’s Range: 47.22 – 51.96 Trade Time: 4:00 PM ET 52wk Range: 25.48 – 60.71 One-Day Stock Return: 11.58% Volume: 1,419,317 Prev. Close: 46.27 Avg. Vol. (3m): 1,921,518 Open: 47.25 Market Cap: 1.63B Bid: N/A P/E (ttm): 25.43 Ask: N/A EPS (ttm): 1y Target...

#32) Under traditional common law, the damages awarded to his family for the &nbs

#32) Under traditional common law, the damages awarded to his family for the accidental death of the family breadwinner used to be a) The present value of his expected future earnings. b) The present value of his expected future earnings and pension benefits. c) Derived from the compensating differentials in pay for high-risk jobs. d) The present value of his expected future earnings and pension benefits, plus punitive damages for the loss of a...

Mendels second law is often referred to as the law of independent assortment . create an...

Mendels second law is often referred to as the law of independent assortment . create an example to illustrate it and chi-square to verify the results

A court of law in a developing nation has awarded substantial compensatory damages to Microsoft Corporation,...

A court of law in a developing nation has awarded substantial compensatory damages to Microsoft Corporation, Adobe Systems and Quest Software restraining a company based in the national capital from using or distributing their pirated and unlicensed softwareThe court's order came on a suit filed Microsoft Corporation , Adobe Systems and Quest Software against a firm..after they came to know that the company was using their unlicensed software programs on its computers. Source: Based on a news item published in...

1. If an employee is awarded stock with a 2-year vesting period, what are the advantages...

1. If an employee is awarded stock with a 2-year vesting period, what are the advantages and disadvantages to the employee to making a Section 83 election? How is this election made? Does the election (or lack of election) impact the employer? 2. The following statement is true: Lapse restrictions affect the timing, but not the amount, of compensation recognized under Section 83. Nonlapse restrictions affect the amount, but not the timing, of compensation recognized under Section 83. Explain why...

At vest date, Incentive Stock Options create a _ whereas Non-qualified Stock Options create a _...

At vest date, Incentive Stock Options create a ___________ whereas Non-qualified Stock Options create a ___________ for the employer under GAAP. unfavorable permanent difference; deferred tax liability unfavorable permanent difference; deferred tax asset favorable permanent difference; deferred tax liability favorable permanent difference; deferred tax asset

Surveys are often used to evaluate systems within health care entities. Such objective data is often...

Surveys are often used to evaluate systems within health care entities. Such objective data is often used by leadership within an organization to evaluate the effectiveness of organizational systems and processes. Suppose there was a recent decline in patient satisfaction, employee satisfaction, and culture of safety surveys. As an innovative healthcare leader, how would you approach addressing this recent data?

Question