Originally Posted by HonestChieffan
Options in the USA chart are valued at issue price. Thus it does not reflect true value as the share price can drop and the option has no value or a negative value.
There is no cost to the company for issuing an option until it is exercised. Thus there is no opportunity cost.
This explains it as well as I ever could. Interpreting executive compensation is extremely difficult and most will tell you there are several different approaches you can take.
You are absolutely wrong on the impact on the decision making by issuing options. In the case I referenced, three years had to pass before the option was exercise able. That creates agape between short and longer term decisions. And they can go ten years so if the company does have a downturn, it may be 10 years before they have value.
I think your position would have merit if you had a specific that you could reference. Just railing against the man is not getting it done.
I've done a ton of research on this. Business Week. Wharton. HBR. Wall Street Journal. There is overwhelming criticism of stock-based incentives. Don't' act like this is just me talking. If you want me to keep posting even more links, I will, because it's everywhere.