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STOCK OPTION PLANS FOR CEO COMPENSATION
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María Dolores Álvarez-Pérez 
, Edelmira Neira Fontela
Abstract
Stock options plans (SOPs) can be used as a CEO remuneration instrument. Our study examines the dimensions of SOPs, the types of SOP used by Spanish firms to reward the CEO, and the effect of different SOP types on CEOs’ behavior. The results show that traditional options “at the money” are the most used by Spanish firms. Although this SOP type is not the most appropriate from the optimum contract theory approach, it offers high potential gains to the CEO. It may therefore increase the capacity of companies to attract and retain competent executives.
Keywords: Stock Option Plans, CEO Compensation, Incentives
How to cite this paper: Álvarez Pérez, M. D., & Neira-Fontela, E. (2005). Stock option plans for CEO compensation. Corporate Ownership & Control, 3(1), 88-100. https://doi.org/10.22495/cocv3i1p8
