Do CEO options work? Comparing similar companies with different compensation policies yields some interesting, if conflicting, results - 17 Feb 2009

Do CEO options work? Comparing similar companies with different
compensation policies yields some interesting, if conflicting, results

http://network.nationalpost.com/np/blogs/fpmagazinedaily/archive/2009/02/17/do-ceo-options-work-comparing-similar-companies-with-different-compensation-policies-yields-some-interesting-if-conflicting-results.aspx

Skin
in the game. This gruesome metaphor is often invoked by compensation
specialists when justifying expensive CEO options packages. But do
options really result in higher stock prices? We compared companies
with different granting policies to see if CEOs with the most
options-based pay performed better during the difficult markets of 2008.
By
looking at these examples, it seems a generous options-granting policy
can bring in experienced leadership and superior performance (as in the
case of CN). Options, however, may do little to motivate founders who
already own loads of stock (as in the case of Couche-Tard).
Also,
it’s clear from the way the stocks track each other that, regardless of
the incentive, economic factors always play a more important role. — David Dias

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