Loading up CEOs with options leads to riskier performance, according to new research. The evidences shows that options loaded CEOs are more prone to extreme performance, resulting in big gains but more usually, big losses.
The number of options being granted to CEOs is going down and shareholders are now putting more focus on performance pay. But there are serious questions about whether performance pay works. Maybe it delivers the wrong results.
Apple has announced it's boosting its green credentials by reducing or eliminating the use of toxic materials in its products in the next few years and increasing its recycling of computers and iPods. You have to be wonder whether it's coincidental. You can't really separate that from what's going on with Apple's options scandal.
Ban compensation consultants from doing other work for the company, set pay limits before searching for new executives, ban golden parachutes and go easy on the stock and options. These are just some solutions to stop soaring executive pay.
Months into the federal probe of options backdating at Apple and the chances of a criminal case against Jobs are fading fast. Jobs approved the backdating but the investigation has found no evidence that he directed the backdating of his own grant or covered it up. That means there's no official evidence of misconduct.
Apple chief Steve Jobs is digging himself out of the hole he has helped create by all those backdated options. First, a Disney probe has confirmed there was backdating but appears to clear Jobs of any wrong doing. Then Apple has announced its unbackdating options of employees and giving them cash to pay the tax bill.
American chief executives saw the value of their stock options more than triple last year thanks to a booming market. That's on top of those generous pay rises and bonuses.
