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.

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Definitions:

Discrimination

The unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, sex, or disability.

Paired Actors

A research methodology that employs two individuals with identical qualifications but different backgrounds to test for discrimination in various settings.

Employment Disparities

Differences in employment opportunities, wages, and career progression faced by individuals based on race, gender, religion, or other marginalized statuses.

Institutional Racism

Discriminatory practices and policies that are embedded within and perpetuated by social and governmental institutions, affecting marginalized groups negatively.