Summary
Common misconceptions about stock options
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Extract
Seven myths about stock options.
Stock options do more for stockholders than motivate management to keep share prices high indeed, that may be the least of what they do. Here is a collection of some common misconceptions.
FEW TOPICS are more likely to raise the ire of stockholder activists than management compensation. And given that among the largest companies about 80% of compensation is paid in some form of equity, it is not surprising that stock options have come under fire from those who think executives are overpaid. The problem is that critics tend to focus on the managers who win big from stock options without considering why so much pay comes in the form of options and the risk a manager takes by accepting options. This difference in perspective has led to confusion of the issues and to proposals for reform that would do more harm than good. Thus, I have collected some common misconceptions about stock options and some straight re...See the full content of this document
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