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Executive Investigator Tracking and Analyzing Executive Salaries, Bonuses, and Perks
 Tuesday, July 10, 2007
A new study conducted by the
Institute for Operations Research and the Management Sciences
(INFORMS) found that employee stock option plans (ESOPs) offered to executives as part of their compensation
package could significantly increase the risk of fraud in the form of rigged share prices. The study's authors said, "Our results demonstrate two factors substantially increase the
likelihood of financial misrepresentation: extremely low performance relative to
average performance in the firm's industry, and high percentages of CEO
compensation in stock options." Interestingly, the authors found that bonuses did not have the adverse affect of stock options.
These days there is great incentive for performance-based compensation as it is supposed to motivate executives to boost performance. Many of the tax laws and new disclosure laws clearly favor these types of performance-based compensation. However, it appears as if stock options may now be a double-edged sword - the SEC must identify new ways to discourage aggressive, unethical or illegal behaviors.
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© 2009, Accelerize New Media, Inc. (OTC-BB: ACLZ)
Senior Editor: Justin Kuepper
Executive Investigator reports on and analyzes Executive pay, perks and other compensation, and current news that relates to Executive Compensation.
The content in this blog may be republished or quoted without express permission as long as credit is given and a link provided to ExecutiveInvestigator.com
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