The Efficiency of Equity-Linked Compensation: Understanding the Full Cost of Awarding Executive Stock Options

By L. Meulbroek. 2001

428 citations recorded by the source corpus.

Subfields: Accounting, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/3192f0eb1235ea4f7e2f87a26b2bd2e539c84e8d

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Citations in the corpus

6 Pay and Performance: Individuals, Groups, and Executives (2009, background): “In addition, depending on such variables as time to retirement, previously accumulated equity in the firm, and other personal wealth, executives may theoretically value the marginal stock and option compensation they receive differently from the value intended by the firm (Hall & Murphy, 2002 ; Lam”
Institutional Ownership Differences and International Diversification: The Effects of Boards of Directors and Technological Opportunity (2003, background): “However, Meulbroek (2001) argued that the nondiversified personal holdings of inside directors expose them to high volatility and risk.”
How does owners’ exposure to idiosyncratic risk influence the capital structure of private companies? (2008, positive): “In addition to the regressors already employed in the demand equation, we control for the length of the relationship with the company’s main financial institution, since it was shown that an established banking relationship can influence the quantity and the price of available credit (see, for examp”
Governance, organizational capabilities, and restructuring in transition economies (2003, background): “However, managerial shareholding may lead to entrenchment in a risky environment where managers have undiversified investment portfolios (Meulbroek, 2001; Morck et al., 1988).”
The Trouble with Stock Options (2003, positive): “Meulbroek (2001) uses a non-utility-based approach to distinguish between cost and value and obtains similar results. employees who believe they can increase company stock prices will be attracted to companies offering relatively more option-based compensation.”
Linking pay to performance--compensation proposals in the S&P 500 (2001, background): “Rappaport (1999), for example, argues that stock options awarded to managers in rising stock markets reward managers regardless of the company’s performance relative to its competitors and makes a case for implementing stock options where the rewards are tied to a selected index that provides better”
Executive Compensation: A Survey of Theory and Evidence (2017, positive): “Executives receive performance-linked pay and have often large holdings of company stock and options that are highly correlated with their rm-speci c human capital (Lambert, Larcker and Verrecchia, 1991; Meulbroek, 2001; Hall and Murphy, 2002).”