Impacts of future compensation on the incentive effects of existing executive stock options
| Autor: | Chun-Hua Tang |
|---|---|
| Rok vydání: | 2016 |
| Předmět: |
040101 forestry
Finance Economics and Econometrics 050208 finance Actuarial science Executive compensation business.industry media_common.quotation_subject 05 social sciences Non-qualified stock option Stock options 04 agricultural and veterinary sciences Restricted stock Incentive Cash 0502 economics and business 0401 agriculture forestry and fisheries business Stock (geology) media_common |
| Zdroj: | International Review of Economics & Finance. 45:273-285 |
| ISSN: | 1059-0560 |
| Popis: | This paper analyzes the impact of compensation offered in the future on the incentive effects of executive stock options that have already been granted. I show that in many cases, subsequent compensation in the form of options is more likely to maintain the incentive effects of existing options than the subsequent grant of cash salaries or stock. The numerical results explain why firms continue to grant options repeatedly to executives. I suggest that, when designing pay packages or estimating the sensitivity of executive pay to firm performance, we should consider the impact of future compensation. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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