Question

You are $\mathrm{CEO}$ of Titan Industries and have just been awarded a large number of employee stock options. The company has two mutually exclusive projects available. The first project has a large NPV and will reduce the total risk of the company. The second project has a small NPV and will increase the total risk of the company. You have decided to accept the first project when you remember your employee stock options. How might this affect your decision? 

   You are $\mathrm{CEO}$ of Titan Industries and have just been awarded a large number of employee stock options. The company has two mutually exclusive projects available. The first project has a large NPV and will reduce the total risk of the company. The second project has a small NPV and will increase the total risk of the company. You have decided to accept the first project when you remember your employee stock options. How might this affect your decision?
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Fundamentals of Corporate Finance
Fundamentals of Corporate Finance
Stephen A. Ross;… 11th Edition
Chapter 25, Problem 7 ↓

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Employee stock options are typically tied to the performance of the company's stock. If the first project has a large NPV and is expected to increase the company's stock price, accepting this project could potentially increase the value of the CEO's stock options.  Show more…

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You are $\mathrm{CEO}$ of Titan Industries and have just been awarded a large number of employee stock options. The company has two mutually exclusive projects available. The first project has a large NPV and will reduce the total risk of the company. The second project has a small NPV and will increase the total risk of the company. You have decided to accept the first project when you remember your employee stock options. How might this affect your decision?
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