Despite what critics say, stock option grants are the best form of executive compensation ever devised. But just having an option plan isn’t enough. You have to have the right plan.
Post
Post
Share
Annotate
- Save
- Get PDF
Buy Copies
Post
Post
Share
Annotate
- Save
- Get PDF
Buy Copies
Twenty years ago, the biggest component of executive compensation was cash, in the form of salaries and bonuses. Stock options were just a footnote. Now the reverse is true. With astounding speed, stock option grants have come to dominate the pay—and often the wealth—of top executives throughout the United States. Last year, Jack Welch’s unexercised GE options were valued at more than $260 million. Intel CEO Craig Barrett’s were worth more than $100 million. Michael Eisner exercised 22 million options on Disney stock in 1998 alone, netting more than a half-billion dollars. In total, U.S. executives hold unexercised options worth tens of billions of dollars.
A version of this article appeared in the March–April 2000 issue of Harvard Business Review.
Read more on Accounting or related topics Motivating people and Compensation and benefits
BH Brian J. Hall is the Albert H. Gordon Professor of Business Administration and
Post
Post
Share
Annotate
- Save
- Get PDF
Buy Copies
Read more on Accounting or related topics Motivating people and Compensation and benefits
