Question

I have selected Tesla to continue my discussion posts. Tesla is using their stock options for performance-based awards (Tesla, Inc., 2019). The 2019 Plan provides for the granting of stock, restricted stock, RSUs, stock appreciation rights to employees, directors and consultants. The options are exercisable over a maximum period of 10 years from their grant date and vesting terminates when the employment or consulting relationship ends (Tesla, Inc., 2019).

In December 2019 the company’s proceeds from exercises of stock options and other stock issuance was $263 million.

If I was a retiree to earn extra money above dividends, I would sell my shares if and when the stock price increased above the strike price initially paid for the options.

Required:

Critique the ABOVE view on mitigation strategies and offer a counterpoint or additional resources the students can use to expand their understanding.

Answer 1

The mitigation strategy is made up of three main required components: mitigation goals, mitigation actions, and an action plan for implementation. These provide the framework to identify, prioritize and implement actions to reduce risk to hazards.

Mitigation Goal:Mitigation goals are general guidelines that explain what the community wants to achieve with the plan. They are usually broad policy-type statements that are long-term, and they represent visions for reducing or avoiding losses from the identified hazards.In the above case the goal is to increase the earning (earn extra money above dividends)

Mitigation actions: Mitigation actions are specific projects and activities that help achieve the goals.In, the above case to earn extra money he can sell his shares when the price of the share increase above the strike price .

Action plan: The action plan describes how the mitigation actions will be implemented, including how those actions will be prioritized, administered and incorporated into the community’s existing planning mechanisms. In a multi-jurisdictional plan, each jurisdiction must have an action plan specific to that jurisdiction and its vulnerabilities.

In, the above case to earn extra money first the person will check the price of the shares existing in the market then he will check the strike price and if the existing price is above strike price then it will approach his broker to sell its shares . If, the strike price is more than the existing price person will ask its broker to acknowledge him whenever the prices rise.