SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?


To: GVTucker who wrote (47701)2/1/2001 10:38:21 AM
From: The Phoenix  Read Replies (1) | Respond to of 77400
 
GV,

That excerpt appears to be targeted at "pay" not incentive options. Nonetheless the past few years (I'm assuming this is when the study was done) is not a good indicator since the plethora of dot.com's likely scewed the data. In that instance there were many exec's and line workers that were making millions on options while the company was not executing.... for that matter the same can be said of investors - making money on companies that had no profits. So, I don't think the study (having not read it of course) can do justice to the issue.

Bottom line is that options are worthless unless the company executes... if they do everyone wins... if they don't no one wins. To take the analogy of the race car driver... maybe he's just naturally good... so does that mean that he shouldn't enjoy the windfall from his success? Options are a way to share a companies success with their employee's. It's really quite simple. No success - no sharing.

OG



To: GVTucker who wrote (47701)2/1/2001 11:11:58 AM
From: Wyätt Gwyön  Read Replies (1) | Respond to of 77400
 
The primary reason for linking executive pay to performance may be to provide 'cover' for huge payouts to senior management."

That is exactly what I think. Meshes with tax law as you note, and is more politically correct, as companies don't have to headline the exorbitant salaries they pay their top people.