Examlex
Suppose the CEO of a major corporation has five subsidiary companies. Only one of these companies is making better than the return on similar investments that the company could be making if it invested its financial capital outside the company. The CEO tells each of these subsidiary companies that the rate of return that they are earning is not acceptable and must rise to the level of these identified companies. He tells them if they can't come up with a plan in twelve months that their companies will be sold. If each of these companies was actually making money can you come up with an economic argument for why it is still rational for this CEO to sell them if they don't abide by his directive.
Stock Options
Financial incentives given to employees, granting them the right to buy the company's stock at a set price in the future, typically aimed at aligning their interests with the company's performance.
Securities and Exchange Commission
A U.S. federal agency responsible for regulating the securities industry, including enforcing federal securities laws and regulating securities exchanges.
Executive Compensation
The financial and non-financial rewards given to senior management and executives of a company, which may include salary, bonuses, stock options, and other benefits.
Company's Performance
The overall effectiveness and success of a company in achieving its objectives, often measured through financial, operational, and customer satisfaction metrics.
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