Stock options (A) are a primary strategy used to connect executive performance to organizational objectives, particularly long-term financial performance and shareholder value. At the SPHR level, executive compensation is designed to align leaders’ decisions with sustainable organizational success.
Stock options reward executives based on the organization’s market performance over time, thereby encouraging strategic decision-making that supports growth, profitability, and competitiveness. Because the value of stock options increases only if the organization performs well, executives share in both risk and reward—creating strong alignment with organizational outcomes.
Signing bonuses (B) are short-term attraction tools and do not reinforce ongoing performance. Golden parachutes (C) provide severance protection and are unrelated to performance alignment. Customized benefits (D) may support retention but do not directly link executive behavior to organizational results.
SPHR exam content emphasizes pay-for-performance alignment, especially at senior leadership levels, where compensation structures influence strategic behavior. Long-term incentives such as stock options are central to executive rewards strategies because they reinforce accountability for sustained organizational success.
References :
HRCI SPHR Exam Content Outline — Functional Area: Total Rewards (executive compensation; incentive alignment).
HRCI SPHR Study Guide — Long-term incentive plans and executive performance linkage.
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