CLIMBING Toward a Common Goal.
- Resource Type
- Article
- Authors
- Flanagan, Tom; Underwood, Mike; Bubnovich, Nick
- Source
- Financial Executive. Jun2003, Vol. 19 Issue 4, p30-32. 3p.
- Subject
- *INVESTOR relations (Corporations)
*CORPORATE corruption
*SECURITIES violations
*STOCK ownership
*OPTIONS (Finance) -- Law & legislation
*CORRUPTION
SCANDALS
- Language
- ISSN
- 0895-4186
The article focuses on stock options abuses and on expensing of options. It states that significant stock market declines combined with corporate scandals has brought into question if stock options align management's interests with shareholder interests. It mentions a study from Rutgers University examining stock option grants and shareholder returns from 1992 to 2001 that found companies that dispensed significantly greater-than-average option grants to top executives had lower total returns to shareholders than companies that dispensed a smaller share of options. It comments on the harsh treatment company stocks receive when analysts' expectations are not met.