Asked by Shelby Bliss on Jul 27, 2024
Verified
Employees who receive stock options as incentive pay must exercise the stock options even if the stock price decreases.
Stock Options
Financial incentives offered to employees, providing them the right to purchase company stock at a set price for a specific time period.
- Acquire knowledge about the impact and duties of stock options and retention bonuses as parts of employee compensation packages.
Verified Answer
MW
Michelle WrightAug 01, 2024
Final Answer :
False
Explanation :
Employees with stock options have the option (but are not required) to exercise their options to buy company stock at a predetermined price. However, if the stock price decreases, it may no longer be advantageous for the employee to exercise their options and purchase the stock at a higher price than it is currently trading for. Therefore, employees are not required to exercise their stock options if the stock price decreases.
Learning Objectives
- Acquire knowledge about the impact and duties of stock options and retention bonuses as parts of employee compensation packages.
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