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Essay / Research Paper Abstract
This is a 4 page paper that provides an overview of footnote disclosures. The propensity for this standard to undermine the value of an organization is explored. Bibliography lists 5 sources.
Page Count:
4 pages (~225 words per page)
File: KW60_KFebstk1.doc
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Unformatted sample text from the term paper:
faced by the telecommunications industry, a backlash against outrageously high executive compensation swiftly ensued. Executive salaries were slashed across all industries, to levels more in keeping with a realistic assessment
of the market. Of course, it would be na?ve to think that these executives would simply be willing to give up their capital. Indeed, the compensation for most executives has
not diminished since the backlash, but instead has actually grown; it is simply the case that while executive compensation used to be primarily salary, that figure is now offset by
stock options. Stock options allow the holder to purchase a set number of pieces of company stock at a set price, within a certain range of dates. For organizations that
expect the price of stocks to increase, this means that option holders have the potential to cash in their options at a fortuitous moment, getting stocks for a price much
lower than the current real market value. The use of stock options in compensation has now become so ubiquitous that many companies such as eBay even use them in employee
compensation now, in an attempt to derive many of the same benefits enjoyed by executives with stock options, such as an increased incentive for performance and the capacity to (legally)
under-report expenses on accounting sheets. This paragraph helps the student identify the benefits of choosing stock options as compensation. To be sure, there are many compelling benefits to choosing
stock options as a form of a compensation. The first and perhaps the most legitimate is that these stock options tend to "tie pay to performance", establishing conditions whereby a
major portion of employees compensation is tied to the success or failure of the organization (as determined by the rise or fall of stock prices) (Pirraglia, 2005). This gives employees
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