Comments on: Is Restricted Stock the Answer to Executive Compensation? http://blog.robertsalomon.com/2007/10/17/is-restricted-stock-the-answer-to-executive-compensation/ Mon, 06 Feb 2012 15:52:29 +0000 hourly 1 http://wordpress.org/?v=3.3 By: Executive Compensation Guy http://blog.robertsalomon.com/2007/10/17/is-restricted-stock-the-answer-to-executive-compensation/comment-page-1/#comment-23 Executive Compensation Guy Mon, 10 Dec 2007 22:13:09 +0000 http://blog.robertsalomon.biz/?p=31#comment-23 Definitely some interesting points in the article about restricted stock for executive compensation. I'm no expert on the matter so can't comment with conviction, but I agree that current scenarios (stock options, etc.) are not working as well as they should. Definitely some interesting points in the article about restricted stock for executive compensation. I’m no expert on the matter so can’t comment with conviction, but I agree that current scenarios (stock options, etc.) are not working as well as they should.

]]> By: zaph http://blog.robertsalomon.com/2007/10/17/is-restricted-stock-the-answer-to-executive-compensation/comment-page-1/#comment-22 zaph Fri, 26 Oct 2007 16:08:36 +0000 http://blog.robertsalomon.biz/?p=31#comment-22 Obiously, if you are long a call, to maximize value you would want to maximize voltility. I think they should be given an out of the money call, and a short out of the money put i.e. they make money if the stock price goes up beyond a band, but are penalized in compensation if stock price goes below a certain level. These strike prices can be adjusted based on the kind of risk taking behaviour you want. Preventing them from viewing this as free money is by having them experience the pain (compensation wise) if they take undue risks. Obiously, if you are long a call, to maximize value you would want to maximize voltility. I think they should be given an out of the money call, and a short out of the money put i.e. they make money if the stock price goes up beyond a band, but are penalized in compensation if stock price goes below a certain level.

These strike prices can be adjusted based on the kind of risk taking behaviour you want.

Preventing them from viewing this as free money is by having them experience the pain (compensation wise) if they take undue risks.

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