Table: Fixing the Options Mess

BE STINGY

Boards should hand out fewer options, and the government should discourage mega-grants by creating tax penalties for companies that use them

USE BETTER OPTIONS

Traditional options should be replaced by indexed, premium-priced, or performance-vesting options--anything that links option value or vesting to specific goals

REQUIRE A BIGGER STAKE

CEOs should have to convert a substantial portion of their vested, in-the-money options into shares within three years--and hold them for the duration of their employment

ELIMINATE THE CUT-AND-RUN

Execs should be required to wait six months from the day they exercise options before they sell the shares

STOP THE TAX PAYMENTS

Tax reimbursements, or "gross ups," that pay taxes execs owe on exercised options should be banned

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