Six Challenges In Designing Equity-Based Pay
AbstractThe past two decades have seen a dramatic increase in the equitybased pay of U.S. corporate executives, an increase that has been driven almost entirely by the explosion of stock option grants. When properly designed, equity-based pay can raise corporate productivity and shareholder value by helping companies attract, motivate, and retain talented managers. But there are good reasons to question whether the current forms of U.S. equity pay are optimal. In many cases, substantial stock and option payoffs to top executives-particularly those who cashed out much of their holdings near the top of the market-appear to have come "at the expense of their shareholders", generating considerable skepticism about not just executive pay practices, but the overall quality of U.S. corporate governance. At the same time, many companies that have experienced sharp stock price declines are now struggling with the problem of retaining employees holding lots of deep-underwater options. 2003 Morgan Stanley.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Morgan Stanley in its journal Journal of Applied Corporate Finance.
Volume (Year): 15 (2003)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=1078-1196
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Igor Filatotchev & Gregory Jackson & Chizu Nakajima, 2013. "Corporate governance and national institutions: A review and emerging research agenda," Asia Pacific Journal of Management, Springer, vol. 30(4), pages 965-986, December.
- Bruno S. Frey & Margit Osterloh, 2004.
"Yes, Managers Should Be Paid Like Bureaucrats,"
CREMA Working Paper Series
2005-03, Center for Research in Economics, Management and the Arts (CREMA).
- Bruno S. Frey & Margit Osterloh, 2005. "Yes, Managers Should Be Paid Like Bureaucrats," CESifo Working Paper Series 1379, CESifo Group Munich.
- Bruno S. Frey & Margit Osterloh, . "Yes, Managers Should be Paid Like Bureaucrats," IEW - Working Papers 187, Institute for Empirical Research in Economics - University of Zurich.
- Paul André & Samer Khalil & Michel Magnan, 2012. "The adoption of deferred share unit plans for outside directors: economic and social determinants," Journal of Management and Governance, Springer, vol. 16(1), pages 81-105, February.
- Loureiro, Gilberto & Makhija, Anil K. & Zhang, Dan, 2011. "Why Do Some CEOs Work for a One-Dollary Salary?," Working Paper Series 2011-7, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
- Bizjak, John M. & Lemmon, Michael L. & Naveen, Lalitha, 2008. "Does the use of peer groups contribute to higher pay and less efficient compensation?," Journal of Financial Economics, Elsevier, vol. 90(2), pages 152-168, November.
- Anne Farrell & Susan Krische & Karen Sedatole, 2007. "Archival and experimental evidence on employees subjective valuations of stock options," Framed Field Experiments 00114, The Field Experiments Website.
- Bulan, Laarni & Sanyal, Paroma & Yan, Zhipeng, 2010. "A few bad apples: An analysis of CEO performance pay and firm productivity," Journal of Economics and Business, Elsevier, vol. 62(4), pages 273-306, July.
- Jörn Hendrich Block, 2008. "Are CEOs in Family Firms Paid Like Bureaucrats? Evidence from Bayesian and Frequentist Analyses," SFB 649 Discussion Papers SFB649DP2008-033, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.