Stock option
In theory, stock options should motivate executives to perform better - but in practice, they haven't always had that effect. Why?
In theory, stock options should motivate executives to perform better by tying their pay to their company's performance. So why do some argue the practice has just become a way for the highest earners to boost their salaries even further? Tim Harford turns to ancient Greek philosophy and Bill Clinton's presidency in search of the answer.
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Sources
Aristotle's Politics, Book 1
Derivatives for Decision Makers: Strategic Management Issues -Â George Crawford and Bidyut Sen, 1996, Wiley and Sons
Research Handbook on Securities Regulation in the United States - Jerry W. Markham, Rigers Giyshi, 2014, Edward Elgar Publishing
The Trouble with Stock Options - Brian J. Hall and Kevin J. Murphy, June 2003, NBER Working Paper No. 9784
Pay Without Performance: The Unfulfilled Promise of Executive Compensation, 2003. Lucian A. Bebchuk, Jesse M. Fried
John M. Olin Center for Law, Economics and Business Discussion Paper Series, Paper 528
The Impact of Ownership Structure on CEO Compensation: Evidence from the UK, Master Thesis, 2016-17, Radboud University, Nijmegen Faculty of Management
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