Access the full text.
Sign up today, get DeepDyve free for 14 days.
J. Carpenter (1997)
The Exercise and Valuation of Executive Stock OptionsEconometrics: Applied Econometrics & Modeling eJournal
Steven Huddart, Mark Lang (1996)
Employee stock option exercises an empirical analysisJournal of Accounting and Economics, 21
(2003)
Six Challenges in Designing Equity-Based Pay
J. Mccormack, Ian Gow (2001)
EVA IN THE E&P INDUSTRY: THE CASE OF NUEVO ENERGYJournal of Applied Corporate Finance, 13
Almost everyone agrees that equity‐based incentive compensation can play an important role in increasing shareholder value, but there is considerable disagreement as to what that role should be and how equity pay should be packaged. What's more, there has been a backlash against equity pay that has compensation committees, investors, and corporate watchdogs on full alert. The authors of this article provide some basic guidelines for equity pay that could help to restore confidence in this useful element of compensation–guidelines that encompass the type of equity instrument, the level of equity‐based pay, the extent to which equity pay is performance based, and the structure of the equity package in terms of vesting, exercise, and expiry. They start by acknowledging that the role of equity pay is limited by the extent to which shareholder value can be affected by the manager in question. They recommend building steadily to a constant level of stock price exposure and then gradually reducing this level after retirement. For most companies, equity‐based pay should be significant only for a handful of employees; performance based cash bonuses provide better “line‐of‐sight,” especially for operating managers who are somewhat removed from corporate‐wide decisions. And disclosure–both internal and external–is perhaps the most important aspect of equity‐based pay plans.
Journal of Applied Corporate Finance – Wiley
Published: Mar 1, 2004
Read and print from thousands of top scholarly journals.
Already have an account? Log in
Bookmark this article. You can see your Bookmarks on your DeepDyve Library.
To save an article, log in first, or sign up for a DeepDyve account if you don’t already have one.
Copy and paste the desired citation format or use the link below to download a file formatted for EndNote
Access the full text.
Sign up today, get DeepDyve free for 14 days.
All DeepDyve websites use cookies to improve your online experience. They were placed on your computer when you launched this website. You can change your cookie settings through your browser.