search query: @author Tian, Y.S. / total: 6
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| Author: | Johnson, S.A. Tian, Y.S. |
| Title: | Indexed executive stock options |
| Journal: | Journal of Financial Economics
2000 : JUL, VOL. 57:1, p. 35-64 |
| Index terms: | Executives Indexation Option valuation Stock options |
| Language: | eng |
| Abstract: | The authors design a pricing model for an executive stock option with a strike price indexed to a benchmark and investigate its valuation and incentive implications. In both up and down markets, the indexed option filters out common risks beyond the executive's control, thereby increasing the efficiency of incentive contracts. The indexed option has a different payoff structure and much lower initial value than a traditional option. Incentive effects of the indexed option also differ from those of traditional options. |
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