You Decide: Are stock options and bonus plans an appropriate incentive or a cause for corruption?
Response to the following problem:
Do employee bonus plans provide incentives to work harder and achieve personal and corporate goals, or are they a catalyst for corporate corruption? For example, assume you work for a Fortune 500 company. You are the chief financial officer of the company and are in charge of the company's accounting. The company is doing well; in fact, you have just been informed that members of top management will each receive 10,000 stock options to purchase company stock if earnings meet forecasts.
Your associate tells you that the options will create pressure to meet the forecasts. Is he right?