The Board of Directors of Wireless,Inc

question 15

Essay

The board of directors of Wireless,Inc.is considering two compensation plans for the CEO of the company.The first would pay the CEO a salary of $250,000 for the upcoming year.The second would pay the CEO a salary of $100,000 and provide the CEO with a stock option to buy 100,000 shares of stock for $11 per share.The current price per share of Wireless,Inc.stock is $10 per share.The stock option expires at the end of the year.Why might shareholders prefer the second payment plan? As part of your answer,calculate the breakeven point for the CEO to obtain the same compensation under option two as he or she would under option one.

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Definitions:

Ethnocide

The violent eradication of an ethnic group's collective cultural identity as a distinctive people; occurs when a dominant society deliberately sets out to destroy another society's cultural heritage.

Indigenous Peoples

Refers to ethnic groups native to a land or region, usually with distinct cultures and social institutions prior to colonization or annexation.

Cultural Homogenization

The process through which local cultures are influenced and assimilated by a dominant culture, leading to reduced cultural diversity.

McDonaldization

The process by which the principles of the fast-food industry, such as efficiency, predictability, and control, dominate other sectors of society.