The Most Common Pay-For-Performance System Has Been to Give Managers

question 50

True/False

The most common pay-for-performance system has been to give managers stock options: the right to buy the company's shares at a predetermined (strike) price at some point in the future, usually within ten years of the grant date.

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Definitions:

Output Units

The measured quantity of goods or services produced by a firm or industry.

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing for full industry adjustment to changes.

Extensive Range

A wide scope or variety of something, covering a broad spectrum.

Constant Returns to Scale

A situation in which increasing the scale of production inputs results in a proportional increase in the output.