• Medientyp: E-Artikel
  • Titel: Alignment vs rent-extraction effects of stock options. A conceptual model
  • Beteiligte: Catuogno, Simona; Saggese, Sara; Sarto, Fabrizia
  • Erschienen: Emerald, 2016
  • Erschienen in: Corporate Governance
  • Sprache: Englisch
  • DOI: 10.1108/cg-11-2015-0155
  • ISSN: 1472-0701
  • Schlagwörter: Business, Management and Accounting (miscellaneous)
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  • Beschreibung: <jats:sec> <jats:title content-type="abstract-subheading">Purpose</jats:title> <jats:p>This paper aims to develop a conceptual model that systematically interprets how key governance factors drive the alignment and the rent-extraction effects of executive stock options (SOs) as proxied by plan characteristics.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title> <jats:p>The authors draw on the review of 202 articles published in international academic journals. They collect data from library databases and by hand-searching and citation-tracking relevant papers on the topic. Moreover, the authors review and classify the studies as related with determinants or proxies of alignment and rent-extraction effects of SOs.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Findings</jats:title> <jats:p>The conceptual model systematically interprets the results of the literature review and identifies the relationships between archetypes, driving factors and proxies of the rent/alignment effect of executive SOs. It highlights that, given ownership archetypes, effective (ineffective) governance practices drive the alignment (rent) aim of SOs as proxied by the optimal (non-optimal) plan design.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Practical implications</jats:title> <jats:p>This paper supports compensation committees in selecting the SO characteristics that better attract investors and retain executives. Moreover, it guides future policy making interventions aiming at mitigating the rent-extraction effect of SOs.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Originality/value</jats:title> <jats:p>The paper highlights that the governance determinants of SO aims can be effectively classified as archetypes or drivers of rent-extracting and aligning outcomes of these remuneration tools. Moreover, it offers a useful framework to guide future research efforts by providing a comprehensive interpretation of the relationships between ownership archetypes, driving factors and proxies of SO effects.</jats:p> </jats:sec>