(e) The company shares option plan is one of the most common types of executive compensation. It is argued that rewarding officers with company shares would encourage them to behave in the best interests of the shareholders. However, critics argue that executive pay is often too high in comparison to regular company wages, and that this motivates officers to behave selfishly.

Required:

Briefly explain ONE (1) benefit and ONE (1) drawback associated with compensating executive with an option to purchase company shares.