Let's discuss this.  Dropping Stock Compensation is probably not the correct solution for all companies.  Obviously, when you are a small company or a company whose stock price is dependent directly on internal deliverables, stock compensation still makes sense.

If the majority of your stock price movement comes from general movememtns in the market, it is hard to argue that internal staff is impacting the stock price (unless you look at relative movement).

In both cases, adding performance metrics to equity programs would be likely to make them more defensible.

We need to be less rigid in our solutions.  There are many right answers out there.  There isn't "one right answer" out there.  Let's hear your opinions

Dan,

I agree with you.  Adding performance requirements to vesting and/or issuance is preferrable to scappring equity compensation lock, stock and barrel.  My analogy is that, even at lower levels, where very few employees have line of sight impact on stock price, stock compensation gets them thinking like owners and making decisions that ultimately benefit the company and shareholders.  Equity compensation is critical not just for leveraging upside for executives, but also for creating a rewards platform that increases employee understanding and solidarity across the enterprise.  The most motivated and engaged employees in my experience are those that participate in equity comp programs.  The worst environments are those that are top heavy in their incentive programs believing that only the top 1% of execs have an impact on company performance. 

Chris Wien