On joining ABC Ltd as Chief Financial Officer, Radha was allotted 500 shares of the company. Identify the type of incentive being described.

Both option 2 and 3

The correct answer is option 4- Both option 2 and 3.

Radha was allotted 500 shares of the company, which indicates that she has been given shares directly, making it a stock option type of incentive.

Co-partnership and stock options are same.

Co-partnership/ Stock option: Under these incentive schemes, employees are offered company shares at a set price which is lower than market price. Sometimes, management may allot shares in line of various incentives payable in cash. The allotment of shares creates a feeling of ownership to the employees and makes them to contribute for the growth of the organisation. In Infosys the scheme of stock option has been implemented as a part of managerial compensation.