Funny Money, Or Real Incentive?

A new study shows that options make poor CEO bait

Fantasize for a moment that you're a CEO candidate negotiating a pay package. Which would you rather get: $10 million in cash, or stock options with an open-market value of $20 million? If you're like most people, you'd take the cash because it's less risky than volatile options. In fact, when companies offer stock options to executives in place of salary, they often have to give them options valued at 250% or so of the cash.

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