Title: The Incentives behind the Adoption of Executive Stock Option Plans in U.S. Corporations
Abstract: This paper reviews the evolution of executive stock option plans and the parallel tax treatment to compare their relative economic importance. On the incentive side, if the option plans were the most efficient means to provide the appropriate managerial incentives, they would have been adopted and used irrespective of their tax treatment. For the tax argument, if the adoption of these plans followed almost totally from favorable changes in their tax treatment, then an optimal tax strategy argument would be the most likely explanation for their inception. Looking at the specific adoption of plans, the optimal tax strategy appears to be the primary motivator of executive stock option plans.
Publication Year: 1992
Publication Date: 1992-01-01
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 15
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