Executive Pay: Stock Options vs. Restricted Stock

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

July 11 (Bloomberg) -- In "This Matters Now," Adam Parker, Chief US Equity Strategist at Morgan Stanley, discusses executive compensation and accounting. He speaks on Bloomberg Television's "Bloomberg Surveillance." (Source: Bloomberg)

Adam parker is with morgan stanley and he is looking at executive compensation and accounting in the 7:00 hour.

Ok.

restrictive stock versus stock options, and this is a use of cash example.

Obviously there is lots of cash on the ballot of the company.

I think one of the key indicators is just how the management teams, the c level executives, are compensated.

The big trend is to pay more in restrictive stock and lesson options.

So if you have restricted stock and you increase your dividends, you will get the dividend on that restricted stock, on the unvested part, the part you are not allowed to have yet.

If you have options, you don't want the dividend.

That devalues them by definition.

We will see more dividend growth.

Hugely incentivized to go for the dividend, and it is almost a double-dip, isn't it?

You are paying it to all the shareholders, you just happened to be one yourself if you are a big shareholder as an executive.

It probably means people are too negative on dividend yielding stocks for those company's where the management teams have paid themselves a lot in restricted stock.

Do you work within the framework that the high amount of cash will always be there, that we will have cash up to our eyeballs, big companies?

If interest rates change dramatically, that could change.

You are talking about washington reform and repatriation and stuff.

You guys have talked about that a lot on your show over the years.

There is not anything imminent there.

You will stay with cash as long as rates stay relatively low.

If you have much higher rates, people would say i have to do something with that.

Quickly, your and the day appetite in the second half of the year.

Does it pick up with all that cash?

It will be slow improvement.

Ceo

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change