Stock options for corporate management have come under increasing fire on Capitol Hill since last year’s Enron debacle. It’s important to understand the importance of stock options as a tool for shareholders as well as the responsibility of corporate management to account for stock options in a full and honest manner.
Stock options play an important role for the owners of a corporation – its shareholders. They help overcome an agency conflict, where management, as agents of the owners, behaves in its own self-interest, which is not always consistent with that of the shareholders.
It is a fact of basic human nature that we all tend to behave in our own self-interest. Issuing stock options to managers makes them shareholders as well. That way, when managers behave in their own self-interest, they are also behaving in the interest of all shareholders. Eliminating stock options for management would leave shareholders with no effective means of overcoming this agency......

Join Now to view the rest of this term paper!
Members: Login to view this research paper.

Title: Expensing Options
Approximate Word Count: 588
Approximate Pages: 3 (250 words per double-spaced page)

With the Term Papers Lab Membership Pass, you get instant access to every essay on this site, including this essay on Expensing Options, for as long as you remain a member.

Other essays sites charge almost $100 for a single term paper. At Term Papers Lab, you can get instant access to over 100,000 research papers for as little as $29.95!