Six Month One Day Employee Stock Option Repricing
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Consider Your Options
| Author | : Kaye A. Thomas |
| Publisher | : Fairmark Press Inc. |
| Total Pages | : 290 |
| Release | : 2005 |
| Genre | : Business & Economics |
| ISBN | : 0967498171 |
This is the 2005 edition of the most popular book on employee stock options. It's a major revision from the previous edition, with new design, content and organization to make it even easier for employees to learn what they need to know about their equity compensation.
The Complete Guide to Employee Stock Options
| Author | : Frederick D. Lipman |
| Publisher | : Prima Lifestyles |
| Total Pages | : 0 |
| Release | : 2001 |
| Genre | : Employee stock options |
| ISBN | : 9780761533825 |
Numerous private and public companies offer stock option plans every year to motivate, retain, and reward employees. But implementing the right stock option plan can be a complex and daunting undertaking, without the proper guidance.The Complete Guide to Employee Stock Optionsunravels the mystery of creating a meaningful equity compensation plan for employees that is favorable for the business. Author and attorney Frederick D. Lipman describes in complete detail the legal, operational, and motivational aspects of developing a stock option program, whether it's for the new start-up looking to attract top talent or the venerable company looking for ways to reward its best performing employees. Readers will discover how to: * Understand the pros and cons of different option plans* Implement the right plan to meet the company's future plans* Motivate key employees with equity compensation* Minimize the risk of losing equity in a volatile market* And much moreThis book also includes useful information for employees who want to understand what their stock options mean and how to maximize their profitability. Complete wi
Characteristics of Firms Responding to Underwater Employee Stock Options
| Author | : Valentina L. Zamora |
| Publisher | : |
| Total Pages | : |
| Release | : 2008 |
| Genre | : |
| ISBN | : |
I examine the characteristics of firms choosing to respond to underwater employee stock options using one of three stock option-based responses. A traditional repricing offers a new and lower exercise price to restore the incentive alignment and retention power lost in underwater options but is subject to potential expense recognition. A 6amp;1 exchange likewise restores what was lost in underwater options but avoids potential expense recognition by delaying the issuance of replacement options until six months and one day later. A makeup grant potentially increases the total option value lost and avoids potential expense recognition, but is more dilutive since old underwater options are not cancelled. Results indicate that makeup grant firms have relatively deeper underwater options with shorter expected remaining lives. Makeup grant firms also issue these options to more non-executives compared to traditional repricing firms. I also find that while both makeup grant and 6amp;1 exchange firms have less insider ownership and historically report positive income than traditional repricings, 6amp;1 exchange firms have greater overhang than makeup grant firms. Taken together, a possible explanation for these results is that firms that have more incentive alignment and/or retention power lost in underwater options prefer makeup grants that potentially increase total option value for its non-executive optionholders. However, when dilution from options is also a concern, it appears these firms may opt for a 6amp;1 exchange. In addition, it is possible that the choice of response is associated more with the desire to avoid recognizing option expense, rather than with potential rent extraction opportunities, as critics claim.
Too Much Is Not Enough
| Author | : Robert W. Kolb |
| Publisher | : Oxford University Press |
| Total Pages | : 231 |
| Release | : 2012-08-23 |
| Genre | : Business & Economics |
| ISBN | : 0199829586 |
The scholarly literature on executive compensation is vast. As such, this literature provides an unparalleled resource for studying the interaction between the setting of incentives (or the attempted setting of incentives) and the behavior that is actually adduced. From this literature, there are several reasons for believing that one can set incentives in executive compensation with a high rate of success in guiding CEO behavior, and one might expect CEO compensation to be a textbook example of the successful use of incentives. Also, as executive compensation has been studied intensively in the academic literature, we might also expect the success of incentive compensation to be well-documented. Historically, however, this has been very far from the case. In Too Much Is Not Enough, Robert W. Kolb studies the performance of incentives in executive compensation across many dimensions of CEO performance. The book begins with an overview of incentives and unintended consequences. Then it focuses on the theory of incentives as applied to compensation generally, and as applied to executive compensation particularly. Subsequent chapters explore different facets of executive compensation and assess the evidence on how well incentive compensation performs in each arena. The book concludes with a final chapter that provides an overall assessment of the value of incentives in guiding executive behavior. In it, Kolb argues that incentive compensation for executives is so problematic and so prone to error that the social value of giving huge incentive compensation packages is likely to be negative on balance. In focusing on incentives, the book provides a much sought-after resource, for while there are a number of books on executive compensation, none focuses specifically on incentives. Given the recent fervor over executive compensation, this unique but logical perspective will garner much interest. And while the literature being considered and evaluated is technical, the book is written in a non-mathematical way accessible to any college-educated reader.
Costs and Incentive Effects of Stock Option Repricing
| Author | : Ulrike Neubauer |
| Publisher | : Peter Lang Publishing |
| Total Pages | : 244 |
| Release | : 2004 |
| Genre | : Business & Economics |
| ISBN | : |
Does repricing of executive stock options, i.e. the practice of lowering the exercise price when options are out-of-the-money unfairly reward managers for poor performance and thereby undermine incentives set by the compensation contract? In a study that compares the pay package containing repriced option with an otherwise adjusted package it is shown that repricing is not more expensive to shareholders than otherwise adjusting non-option compensation components. However, the package containing repriced options provides significantly stronger incentives. Furthermore, a policy that constrains the board of directors from repricing does not have significant effects on shareholders' returns."
Stock Options For Dummies
| Author | : Alan R. Simon |
| Publisher | : John Wiley & Sons |
| Total Pages | : 337 |
| Release | : 2010-03-11 |
| Genre | : Business & Economics |
| ISBN | : 111805377X |
Confused by all the brouhaha surrounding stock options? Let expert Alan Simon demystify this often-confusing investment vehicle for you. If you’re like the majority of the estimated 12 million employees in the U.S. who have stock options as a key component to their compensation packages, you have a vague notion, at best, of how options work and what they can mean to your financial well being. What’s the vesting schedule for your shares and how will their strike price be set? What type of stock option grant will you receive, an ISO (incentive stock option) or an NQSO (non-qualified stock option)? What tax rules apply to your option program? Your financial future could depend on your knowing the answers to these and other questions regarding your company’s stock option plan. Featuring clear explanations of how your stock options might make you money—or not—this friendly guide fills you in on what you need to know to: Understand different types of stock options Read and find traps in your stock option agreement Evaluate the pros and cons of company investment vehicles Assess vesting schedules and tax laws Tap Web resources Simon demystifies the jargon, rules, and tax consequences of stock options. He provides a realistic picture of what to expect from your options, and he helps you see past the hype to understand what your employer is really offering. Important topics covered include: What you need to know before accepting a compensation package that includes options Developing a stock option philosophy and clear-cut goals Knowing whether you’re being treated fairly by your company Making sense of the language of stock options agreements Getting a handle on key restrictions on how you exercise your options Stock option valuation Tax rules and how they apply to different types of options How stock options can be affected by changes at your company Stock Options For Dummies is the only guide you’ll need to get the most out of this important investment vehicle.
An Introduction to Executive Compensation
| Author | : Steven Balsam |
| Publisher | : Elsevier |
| Total Pages | : 406 |
| Release | : 2002-04-13 |
| Genre | : Business & Economics |
| ISBN | : 0080490425 |
General readers have no idea why people should care about what executives are paid and why they are paid the way they are. That's the reason that The Wall Street Journal, Fortune, Forbes, and other popular and practitioner publications have regular coverage on them. This book not only proposes a reason--executives need incentives in order to maximize firm value (economists call this "agency theory")--it also describes the nature and design of executive compensation practices. Those incentives can take the form of benefits (salary, stock options), perquisites (reflecting the status of the executive within the organizational culture. This book is important because it takes the elements of an executive compensation package apart, analyzing them in the contexts of both economic theory and corporate practice and then explains how, under varying conditions, one might construct a compensation package that optimizes an executive's and a corporation's performance.Key Features* Presents an objective analysis of current executive compensation practices* Comprehensively reviews of academic literature and extant practice* Explains and illustrates the various components of the compensation package* Discusses the incentive, financial reporting, tax, political, equity, and firm value effects of those components
Valuation Techniques
| Author | : David T. Larrabee |
| Publisher | : John Wiley & Sons |
| Total Pages | : 628 |
| Release | : 2012-11-06 |
| Genre | : Business & Economics |
| ISBN | : 1118397436 |
Analysis and insights from top thought leaders on a pivotal topic in investing and asset management Valuation is the cornerstone for investment analysis, and a thorough understanding and correct application of valuation methodologies are critical for long-term investing success. Edited by two leading valuation experts from CFA Institute, this book brings together the insights and expertise of some of the most astute and successful investment minds of the past 50 years. From Benjamin Graham, the “father of value investing,” to Aswath Damodaran, you’ll learn what these investment luminaries have to say about investment valuation techniques, including earnings and cash flow analysis. Features the best thinking on valuation from the industry’s masters on the topic, supplemented with dozens of fascinating and instructive real-world examples Comprehensively discusses special valuation situations, such as real options, employee stock options, highly leveraged firms, corporate takeovers, and more Supplies you with the tools you need to successfully navigate and thrive in the ever-changing financial markets Is being produced with the full support and input of CFA Institute, the world’s leading association of investment professionals
