In this report
Options can be a highly effective tool for the right business circumstances.
For example, good candidates for options are early stage businesses, companies in high growth situations, businesses with long-tailed returns, and enterprises that want to promote risktaking and change.
Data suggests that companies that use options outperform their peers.
A Semler Brossy study showed that companies that granted greater than 40% of a CEO’s total direct compensation in stock options in 2007 materially outperformed the market in TSR over the subsequent 10 years.
The governance and regulatory environment has changed considerably since 2000.
The emergence of influential proxy advisors, stronger/more independent boards, more engaged institutional investors, and activist hedge funds serve to better dissuade and control for bad actors.