How does linking executive pay to stock performance make unethical behavior tempting?
A) Executives can use the advantage of knowing the company's inside information to buy or sell stock and create huge personal gains.
B) Executives can roll in the stock price into their base pay to avoid paying a huge tax.
C) Executives will lower the stock prices in order to enjoy bonuses.
D) Executives can use the employee stock ownership plan to buy their company if it is experiencing financial problems.
E) The executives can obtain as many shares as they need at a price that is much lower than the market rate.

Question

Quizplus · Accepted Answer

Linking executive pay to stock performance can create a temptation for executives to use insider information to manipulate the stock price for their personal gain. This unethical behavior can lead to illegal activities such as insider trading, which can harm the company and its shareholders.

How Does Linking Executive Pay to Stock Performance Make Unethical