How Much Is Too Much? Board of Director Responses to Shareholder Concerns About CEO Stock Options

Gillis, William E.; Combs, James G.
May 2006
Academy of Management Perspectives;May2006, Vol. 20 Issue 2, p70
Academic Journal
The article discusses a study which examined the response of board of directors to shareholder concerns about CEO stock options. The authors studied how shareholders react differently to the announcement of stock option plans and whether negative shareholder votes translate into subsequent action by boards of directors. Their findings suggest that shareholder concerns extend to those plans that go only to executives and dilute the value of existing shares. The authors also found that when shareholders vote against plans in large numbers, CEO compensation grows more slowly in the following year.


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