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Employee Stock Option Compensation

A behavioral finance approach

  • Book
  • © 2004

Overview

Authors:
  1. Florian Cornelis Wolff
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Part of the book series: Management, Organisation und ökonomische Analyse (MOÖA, volume 2)

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Table of contents (7 chapters)

  1. Front Matter

    Pages I-XV
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  2. Introduction to the topic

    • Florian Cornelis Wolff
    Pages 1-14

  3. Theoretical & empirical assessment

    • Florian Cornelis Wolff
    Pages 15-52

  4. Review of risk-neutral valuation models

    • Florian Cornelis Wolff
    Pages 53-77

  5. Utility-based stock-option valuation

    • Florian Cornelis Wolff
    Pages 79-144

  6. A new model to value executive stock option

    • Florian Cornelis Wolff
    Pages 145-193

  7. Experimental test of subjective valuations

    • Florian Cornelis Wolff
    Pages 195-215

  8. Conclusion and outlook

    • Florian Cornelis Wolff
    Pages 217-222

  9. Back Matter

    Pages 223-255
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Keywords

About this book

Over the last years stock options have become an integral part of the compensation of senior managers in Germany: Originating in the USA in the 1950s, this form of compensation gained increasing popularity among German corporations during the 1990s, so that by today far over 100 German listed companies grant stock option plans to their employees. Based on recent research the average German CEO ("Vor­ standsvorsitzender") receives approximately 10% of his salary in form of stock op­ tions. The ongoing globalisations of business practises as well as the boom of the Neuer Markt have been key drivers of this development. Initially, from an economic perspective the increasing importance of stock option plans in the compensation of senior managers has to be welcomed: Assuming that senior managers through their actions have the ability to influence the stock price of their companies, stock options represent a performance based type of pay that im­ proves the incentives to senior managers to create additional shareholder value. However, this perspective often neglects the potential costs created by such an in­ centive instrument. Several research studies suggest that companies in some cases generate additional costs through the granting of stock options that can exceed the benefits created by their incentive effect.

About the author

Dr. Florian Wolff promovierte bei Prof. Dr. Peter-J. Jost am Lehrstuhl für Organisationstheorie der Wissenschaftlichen Hochschule für Unternehmensführung (WHU) in Vallendar. Er ist Unternehmensberater bei McKinsey & Company, Inc. in München.

Bibliographic Information

  • Book Title: Employee Stock Option Compensation

  • Book Subtitle: A behavioral finance approach

  • Authors: Florian Cornelis Wolff

  • Series Title: Management, Organisation und ökonomische Analyse

  • DOI: https://doi.org/10.1007/978-3-322-81849-2

  • Publisher: Deutscher Universitätsverlag Wiesbaden

  • eBook Packages: Springer Book Archive

  • Copyright Information: Deutscher Universitäts-Verlag/GWV-Fachverlage GmbH, Wiesbaden 2004

  • Softcover ISBN: 978-3-8244-8213-9Published: 10 December 2004

  • eBook ISBN: 978-3-322-81849-2Published: 06 December 2012

  • Series ISSN: 2627-308X

  • Series E-ISSN: 2627-311X

  • Edition Number: 1

  • Number of Pages: XV, 253

  • Number of Illustrations: 29 b/w illustrations

  • Topics: Human Resource Management

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