How Does Linking Executive Pay to Stock Performance Lead to Unethical

question 43

Multiple Choice

How does linking executive pay to stock performance lead to unethical behavior?

• 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 do not inflate the stock price 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.