Items related to Costs and Incentive Effects of Stock Option Repricing:...

Costs and Incentive Effects of Stock Option Repricing: 3049 (Europaeische Hochschulschriften / European University Studie) - Softcover

Neubauer, Ulrike

 
9783631524015: Costs and Incentive Effects of Stock Option Repricing: 3049 (Europaeische Hochschulschriften / European University Studie)

Synopsis

Does repricing of executive stock options, i.e. the practice of lowering the exercise price when options are out-of-the-money unfairly reward managers for poor performance and thereby undermine incentives set by the compensation contract? In a study that compares the pay package containing repriced option with an otherwise adjusted package it is shown that repricing is not more expensive to shareholders than otherwise adjusting non-option compensation components. However, the package containing repriced options provides significantly stronger incentives. Furthermore, a policy that constrains the board of directors from repricing does not have significant effects on shareholders’ returns.

"synopsis" may belong to another edition of this title.