Question
One of the methods to reduce agency problem is to offer managers ESOP (employee stock option plans). However, this method may not reduce the agency
One of the methods to reduce agency problem is to offer managers ESOP (employee stock option plans). However, this method may not reduce the agency problem because
Group of answer choices
Managers may be less inclined to work hard as they are assured of ESOPS
This proves an incentive to the managers to undertake more volatile projects that will increase stock price.
This would align managers goals with the goals of the corporation and thereby slow growth
This gives the managers more power to vote and build their empire
This provides the managers with an incentive to manipulate information to increase the stock price temporarily. They may then cash out these stocks and change the job before the stock price returns to a normal.
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