Since standard stock options don’t differentiate between value created by external factors and individual performance, investors may be shortchanged and CEOs may be rewarded regardless of merit and top-performing CEOs may be penalized if their tenure coincides with a bear market. Indeed, McKinsey research shows that from 1991 to 2000, market and industry factors drove about 70 percent of the returns of individual companies, company-specific … [ Read more ]
Content: Quotation | Authors: J. C. de Swaan, Neil Harper | Source: McKinsey Quarterly | Subjects: Compensation, Corporate Governance
Companies now have an opportunity to rethink their use of stock options so that they serve shareholders as well as executives.
Content: Article | Authors: J. C. de Swaan, Neil Harper | Source: McKinsey Quarterly | Subject: Corporate Governance