At Hottie Potatee,the Famous Potato Bar Chain,the CEO,CFO,and COO Are

Multiple Choice

At Hottie Potatee,the famous potato bar chain,the CEO,CFO,and COO are each paid a salary and stock options.As with other large,publicly traded companies,the strategy behind structuring executive compensation packages in this way is:

A) Stock options are paid out of after tax earnings.The company has already paid taxes on these earnings.
B) The practice keeps executives from earning more than 20 times the pay of the average company employee.
C) It conveniently eliminates golden parachutes and other incentives.
D) It becomes an incentive because when profits go up,stock prices usually go up.