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.

---

Definitions:

Carrying Cost

The total cost of holding inventory, including storage, insurance, and opportunity costs, among others.

Fixed-Period System

An inventory management system where stock levels are checked at fixed intervals and replenished as necessary, regardless of the inventory level.

Service Level

A measure of the quality of service provided, often defined by the percentage of customer demands met within a certain time period.

Firm

A business enterprise or establishment, often involved in the production and sale of goods or services.