Performance Stock Option Is A Terrible Incentive Tool?
Since 2001, the effect of performance stock option for manager incentive is in a dilemma. Some scholars argue that stock option incentive should be abandoned, but some scholars argue that stock option incentive should be continuously applied. This paper systematically studies the valuation of performance stock option and incentive contracts in order to conclude the three results: (1) to improve the model of vesting numbers and exercise price for their stock option, so that to control managers manipulate the profit and stock price to get the capital gain of their stock share; (2) like the Sarbanes-Oxley Act of USA, this paper sets a penalizing mechanism for manager incentive contract in order to increase the incentive efficiency of performance stock option, (3) this paper shows that above model and theory can provide an answer that the improved model of performance stock option is not a terrible incentive tool but is the most useful incentive tool in practice.
Keywords:Incentivecontract Executive performance Stock option
FU Yuanlue
Center for Accounting Studies/ School of Management, Xiamen University, Xiamen, China, 361005
国际会议
大连
英文
33-43
2011-06-30（万方平台首次上网日期，不代表论文的发表时间）