文档介绍：原文:
Purification of patible allocations
James Bergin
Abstract. This paper examines the relative incentive costs of using stock versus options in management incentive contracts that use market price as the performance measure. We establish that if the manager’s effort has little or no effect on a firm’s operating risk, then the cost of incentive risk is less using stock rather than options. However, this result is reversed if the manager’s effort has a significant impact on the firm’s operating risk.
Keywords: Incentive efficiency, employee stock options, pensation A firm’s stock price is often used as a performance measure in determining pensation because incentive devices based on the stock price directly align management’s interests with the equity-holders’ desire to maximize the value of their shares. We classify these incentive devices as either stock- or option-based. The stock-based devices include restricted stock grants, phantom stocks, and performance shares; their key feature is that the manager’pensation is a linear function of the firm’s stock price, whether that price is high or low. The option-based devices include incentive stock options, nonqualified stock options, and stock appreciation rights; their key feature is that the manager’pensation varies linearly with the firm’s stock price to the extent the price exceeds what is often termed the strike or exerc