Question

CEOs are much more likely to receive high-powered incentives such as stock grants or stock options than ordinary hourly or salaried workers. Which of the following best explains why CEOs are more likely to receive these incentives?

A) CEOs have more experience and skills than other workers.
B) Stock incentives are typically offered to all employees equally.
C) High-powered incentives help align CEO interests with company performance.
D) CEOs are required by law to receive these incentives.

Answer 1

CEOs are given high-powered incentives such as stock options to align their interests with the company's performance, as their decisions have a major impact on the company's success.

Step-by-step explanation:

CEOs are more likely to receive high-powered incentives such as stock grants or stock options than ordinary hourly or salaried workers because high-powered incentives help align CEO interests with company performance. Unlike ordinary workers, CEOs make decisions that have a significant impact on the company's direction and success. Therefore, providing them with stock options incentivizes them to work towards improving the company's stock value, which benefits shareholders. This relationship between incentives and performance is not necessarily linked to the CEO's experience and skills, which means option A is less relevant. Option B is incorrect as these incentives are not typically offered equally to all employees. Option D is also false since there is no legal requirement for these incentives to be provided to CEOs.