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Business, 23.07.2019 23:30, IDONTHAVEABRAIN

Under what circumstances will andrew's stock options generate any gain for him?

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Business, 24.06.2019 19:30, bettybales1986
Andrew westbrook, a 15-year veteran in the consulting industry, is an assistant vice president of marketing for titan consulting, the second largest consulting company in the united states. as part of his compensation package, he has received stock options in the company over the years. because titan has grown rapidly during his time there, andrew (along with many others at the organization) has reaped a great deal of benefit from the stock options he has received, even as an assistant vice president.like many companies, the value of titan stock has decreased substantially over the past two years. the majority of andrew's options entitle him to purchase stock for $22 per share; titan's stock currently trades at $15. the ongoing global recession is expected to continue to weigh on titan's results; the company (and its stock) is not expected to grow much in the short-to-medium time horizon. titan policy prevents andrew from selling his stock until he leaves the firm.given andrew's situation and your knowledge about stock option plans, answer the following questions.1-under what circumstances will andrew's stock options generate any gain for him? if his individual performance exceeds expectationsif the stock price goes up from $15if the stock price goes to $19, which is equal to ($22 + $15)/2.if the company adopts a gain sharing planif the stock price goes above $222-when growth is high, extending stock option grants to lower levels of the organization as titan did is likely to favorable tax treatment in the current year for the individual employeebe highly motivating to lower-level employees because they will perceive that they have a great effect on the organization's resultsgarner favorable tax treatment for the organizationmake lower-level employees think like owners to a larger extentenable employees at all levels to share in the organization's growth, increasing attachment to the organization3- when growth is high, extending stock option grants to lower levels of the organization as titan did is likely to favorable tax treatment in the current year for the individual employeebe highly motivating to lower-level employees because they will perceive that they have a great effect on the organization's resultsgarner favorable tax treatment for the organizationmake lower-level employees think like owners to a larger extentenable employees at all levels to share in the organization's growth, increasing attachment to the organization4- the fact that andrew cannot sell his shares until he leaves the organization is likely to the program more motivatingdecrease the motivation potential of the program for himenable him to better plan his retirementhave little effect on his motivationencourage him not to leave the company during a scandal5- one reason why titan might be less likely to grant employees like andrew stock options in the future is that 's stock options are taxed more heavily now than was the case in the 1990srecent scandals about ethics have drawn attention to stock optionsandrew's stock places him in a higher tax bracket that his firm must matchacademic research suggests that stock options are ineffective motivators for executive employeescustomers are upset at executive pay, and stock options will cause titan to lose business
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