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Incentive
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==== Stock options ==== Incentives are not always effective at aligning employees' incentives with those of the firm.<ref>{{Cite book |last1=Chiappori |last2=Salanié |year=2003 |chapter=Testing contract theory: a survey of some recent work |editor=M. Dewatripont |editor2=L. Hansen |editor3=S. Turnovsky |title=Advances in Economics and Econometrics |volume=1 |pages=115–149 |place=Cambridge |publisher=Cambridge University Press |doi=10.1017/CBO9780511610240.005 |isbn=9780511610240 |s2cid=3067063 |url=http://crest.science/RePEc/wpstorage/2002-11.pdf}}</ref> For example, some [[corporation|corporate]] policies popular during the 1990s aimed to encourage productivity have led to failures as a result of unintended consequences.<ref name=":7">{{Cite book |last=Jain |first=Abha |title=Sports Psychology |publisher=Friends Publications |year=2019 |isbn=978-93-88457-75-0 |location=India |pages=215}}</ref> Moreover, providing [[stock option]]s was intended to boost [[CEO]] productivity through offering a remunerative incentive to align the CEOs' interests with those of the shareholders to improve company performance.<ref name=":7" /> However, CEOs were found to either make good decisions which resulted in a reward of a long-term price increase of the stock, or were found to have fabricated the accounting information to give the illusion of economic success and to retain their incentive-based pay.<ref name=":7" /> Furthermore, it has been found to be extremely costly for firms to incentivize CEOs with stock options. Nevertheless, firms are forced to pay substantial amounts of money to ensure that CEOs act in the best interest of the firms.<ref name=":3" />
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