Question

When restricted stock is granted as executive compensation, the recipient must wait for collecting dividends and...

When restricted stock is granted as executive compensation, the recipient must wait for collecting dividends and exercising voting rights until the restriction period ends.

True or False

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Answer #1

Answer: True, the recipient must wait for collecting dividends and exercising voting rights until the restriction period ends for a restricted stock (granted as executive compensation)

Reason:

Restricted stock: is stock of a company that is not fully transferable (from the stock-issuing company to the person receiving the stock award) until certain conditions (restrictions) have been met. Upon satisfaction of those conditions, the stock is no longer restricted, and becomes transferable to the person holding it and then it can have dividends and voting rights.

The satisfaction of certain conditions, such as continued employment for a period of time or the achievement of particular product-development milestones, earnings per share (EPS) goals, or other financial targets have been met.

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