Stabsseminar ved James Angel

Professor James Angel fra Georgetown University holder stabsseminar ved Institutt for foretaksøkonomi fredag 19. januar.

17.01.2001 - Elin F. Styve

Tema er Market-Adjusted Options For Executive Compensation

Tid og sted:
Fredag 19. januar kl. 1215-1330 i aud. E

Abstract
Compensation theory implies that managers should not be rewarded or penalized for factors outside their control. However, firms do not
adjust the exercise prices of executive stock options to reflect overall stock market movements that are outside the control of the manager. This results in an option much more expensive than necessary to reward a particular level of relative performance. Cur-rent accounting rules give firms a strong incentive not to adjust the prices of the options, since to do so would result in a higher reported expense despite the lower economic cost.

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