Cost Management: A Strategic Emphasis 7th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 18

Compensation at Nonpublic Companies The executive compensation programs of the largest public companies often include the types of equity-based compensation such as stock options and performance shares described in this chapter. Smaller nonpublic companies often have the same types of strategic goals and want to provide the same types of compensation plans but do not have the equity types of compensation to offer since they do not have publicly traded stock.
Required:
1. What are the advantages of equity-based compensation such as stock options and performance shares
2. What types of compensation can nonpublic companies offer that would provide incentives similar to those offered by equity-based compensation