O'Reilly logo

Handbook of the Economics of Finance by Rene M. Stulz, Milton Harris, George M. Constantinides

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

3.7 The Stock Option Explosion (1992–2001)

As shown in Figure 17 (and Figures 3 and 4), the median pay for CEOs in S&P 500 firms more than tripled between 1992 and 2001, driven by an explosion in the use of stock options. CEO incentive compensation in the early 1990s was split about evenly between options and accounting-based bonuses. By 1996, options had become the largest single component of CEO compensation in S&P 500 firms, and the use of options was even greater in smaller firms (and especially high-tech start-ups). By 2000, stock options accounted for more than half of total compensation for a typical S&P 500 CEO.

image

Figure 17 Median Grant-date ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required