스톡옵션의 인센티브효과에 관한 고찰 - 미국의 옵션남용 사례를 중심으로 -
Review on the Effect of the Stock-Options as an Incentive Compensation - Focusing on the Abusing Cases of Stock-Options in U.S. -
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Stock-option plans have become one of the most important components of executive compensation packages of U.S. public corporations, currently accounting for over half of total executive compensation. Under the typical Stock-option plans, they provide grantees with the right to exercise their options and purchase the stock of their corporation at a predetermined exercise price. The rationale for granting Stock-options is to provide executives with retention incentives and incentives to create long-term corporate value as well as shareholders'. This rationale cannot, however, have been accomplished through several abusing methods of Stock-options as we can recognize from recent option backdating scandals and other abusing cases, such as Spring-loading and Option repricing. Several empirical studies have shown that these types of option practices would not create any incentives for corporate executives to improve corporate value,rather current practices provide them an incentive to focus only on maximization of their personal benefit at the expense of companies and shareholders. From this perspectives, this article analyze current option practices which is planned to serve executives' interests, not shareholders', and further discuss the limitations of current regulatory approach by U.S. governmental entities. In addition, I propose some recommendations which remedy above-mentioned problems derived from current option practices, which include as following;first, Executives should not be free to unload stock-options as soon as they vest. Rather, executives should be prohibited from cashing out their vesting options for a specified period of time after vesting;second, the timing of option awards to top executives should not be discretionary. Rather, such awards should be made only on pre-specified dates. third, executives should be required to announce their intention to cash out their vested shared in advance, and corporations should implement certain policies in which allow executives to sell their shares only gradually to the market. Finally, all these debates and my proposals are worth to consider in Korea because the regulations and their contents regarding Stock-Options under Korean Commercial Code are similar to those of U.S.
Abstract
Stock-option plans have become one of the most important components of executive compensation packages of U.S. public corporations, currently accounting for over half of total executive compensation. Under the typical Stock-option plans, they provide grantees with the right to exercise their options and purchase the stock of their corporation at a predetermined exercise price. The rationale for granting Stock-options is to provide executives with retention incentives and incentives to create long-term corporate value as well as shareholders'. This rationale cannot, however, have been accomplished through several abusing methods of Stock-options as we can recognize from recent option backdating scandals and other abusing cases, such as Spring-loading and Option repricing. Several empirical studies have shown that these types of option practices would not create any incentives for corporate executives to improve corporate value,rather current practices provide them an incentive to focus only on maximization of their personal benefit at the expense of companies and shareholders. From this perspectives, this article analyze current option practices which is planned to serve executives' interests, not shareholders', and further discuss the limitations of current regulatory approach by U.S. governmental entities. In addition, I propose some recommendations which remedy above-mentioned problems derived from current option practices, which include as following;first, Executives should not be free to unload stock-options as soon as they vest. Rather, executives should be prohibited from cashing out their vesting options for a specified period of time after vesting;second, the timing of option awards to top executives should not be discretionary. Rather, such awards should be made only on pre-specified dates. third, executives should be required to announce their intention to cash out their vested shared in advance, and corporations should implement certain policies in which allow executives to sell their shares only gradually to the market. Finally, all these debates and my proposals are worth to consider in Korea because the regulations and their contents regarding Stock-Options under Korean Commercial Code are similar to those of U.S.
참고문헌 (27)
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