Which of the Following Statements About Stock Option Plans Is

question 17

Multiple Choice

Which of the following statements about stock option plans is false?

• A) Stock options usually have a grant price equal to the market price of the share when the options are first offered to the executives.
• B) The holder of a stock option has an interest in a company's performance but not in the same manner as a shareholder.
• C) Offering excessive stock options to a company's managers reduces the likelihood they will not always act in the best interest of the investors.
• D) Stock option plans are often a major part of an executive's compensation plan.

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Definitions:

Civil Service

The body of government employees who are employed on merit system principles, excluding military and political appointments.

Partisanship

Devotion or allegiance to a particular political party or cause, sometimes resulting in a polarized political environment.

Civil Service Commission

A government body charged with overseeing the hiring and management of federal government employees to ensure a merit-based, non-partisan civil service.

Pendleton Act

Legislation passed in 1883 that established the United States Civil Service Commission, which ended the spoils system and made merit the basis for hiring and promoting in the federal service.