Unscrupulous managers have learned ways to manipulate stock options and undermine their benefits to stockholders. Discuss some provisions that could be built into the process to curb such practices

Such problems are best attacked directly by requiring the issue of stock options to management to satisfy provisions such as the following:
a . That exercise of those stock options should not be permitted for some substantial period of time, say five years, after they are initially offered;
b. That the stock options be performance-based;
c. That any such grant of options to management be subject to approval by vote of the firm's stockholders; and
d. That the sale of such shares by top management be made public promptly.