Rethinking CEO Stock Options

The stock option component of CEO compensation makes a dubious performance-incentive, says Tuck professor Sidney Finkelstein

With the stock market in a possibly record-setting swoon, one of the first things boards of directors and senior executives are thinking about is: How soon can they reprice their stock options? Ironically, it may well be the prevalence of stock options that has contributed to the current economic mess. What's that, you say? How could anyone speak ill of stock options, the engine of growth in Silicon Valley and a ready path to wealth for millions of executives?

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