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Abstract(s)
With significant equity incentives in its compensation structure, stock option expensing approval affects the compensation structure in the US high-tech industry. A large sample analysis shows that in response to FAS 123R in 2005, the proportion of options offered to CEOs and Top 5 Executives at high-tech firms has decreased, with significance. This in turn does not seem to change, significantly, risk-taking incentives, measured by vega, of CEOs and Top 5 Executives in this industry.
Following the same tendency, a small sample of 10 US high-tech companies presents that non-named executives and employees have suffered a decrease in options offerings from 2002 to 2006 accompanied by the introduction of restricted stock units (RSUs) and the introduction (in some cases) of a binomial option-pricing model. Contradicting this tendency non-employee directors have seen an increase in the level of options granted in the light of FAS 123R.
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Keywords
FAS 123R US High-tech Stock options CEOs Top 5 Executives Non-named Employee executives Non-employee directors