any time they want; ergo, they face no time risk.
The year 2 accounting would not change. The award was not given in this year. The fair value of the award will fluctuate but stock options are an expense (Bodie, Kaplan & Merton, 2003). Once the employees have the options, they have them. The only accounting issue is when the value of the options is changed by the company changing the conditions of the options. That did not happen in year two -- that the company determined it was unlikely for the condition to be met is not a change in the term of the options, just a change in the perceived odds of the options being exercised.
4. The cost would change at… Continue Reading...
their reckless behaviors.
Top management compensation was another factor leading to the fall of Enron. Similar to many top companies in the United States, Enron heavily compensated their management using the stock options to compensate the top management. Based on the company proxy statement in 2001, Enron offered 5.3 Million shares for Ken Lay, and 824,038 shares for Jeff Skilling. Typically, the company offered 12,611,385 shares for all its officers. Although, the stock offering program for the management was geared to motivate the management, however, management failed to create medium and long-term values for the company.
Cuong, (2011) argued that Board of Director of the Enron company failed to fulfill their fiduciary duties towards the shareholders because the top executives were… Continue Reading...
high-end.. While Amazon does have programs for workers who can stick it out, such as stock options, it loses a lot of people getting to that point, and eventually it will find itself getting even lower marginal returns on new hires as the potential talent pool diminishes (O'Donovan, 2015).
This reality alone should be enough to create urgency within the organization. Amazon's leadership needs to recognize that a crisis will occur if it does not act, and therefore it must create the sense of crisis at the leadership levels, before the crisis actually occurs. This leads to the second element of Kotter's plan, which is… Continue Reading...
