What are some problems with granting stock options to employees?

What are some problems with granting stock options to employees?

Please read attach Journal and answer the below questions

. What are some problems with granting stock options to employees? Please describe at least two problems discussed in the article and explain why those problems may hurt shareholders’ interest.

2. If granting stock options to employees is so inefficient, then why do companies grant options? According to the authors, what are some real reasons why companies grant stock options (discuss at least two of these reasons)?

3.The author evaluates the efficiency of stock options based on the assumption that an efficient compensation mechanism should incentivize financial managers to act on behalf of shareholders and try to maximize shareholders’ wealth. Perhaps, this begs the questions: Is it always desirable for financial managers to act solely in the interest of their shareholders? What about debt holders, customers, and employees? What about social responsibilities (e.g. social justice and environmental issues)? In your opinion, who else or what else should financial managers consider when making business decisions?

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    Journal.pdf

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