Nontraditional executive stock options and incentive effects due to systematic riskNontraditional executive stock options and incentive effects due to systematic riskNontraditional executive stock options and incentive effects due to systematic risk

• Main Authors: Su Ting-Fung, 蘇渟方
• Other Authors: 陳昭君
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/23231190714099031287

碩士 === 東海大學 === 財務金融學系 === 95 === Abstract We apply the GARCH option pricing model provided by Duan and Wei（2005）to investigate the systematic risk incentive effects of five nontraditional executive stock options. We find that the systematic risk incentive effects of nontraditional executive stock options are very different. Based on the result of our research, if company uses at-the-money option as compensation and grand to manager, the best choice for low risk companies to compensate CEOs is the indexed option. It is due to that the indexed option possesses not only low issue cost but also low risk incentive. For companies with high risks, we suggest that the purchased option is an appropriate compensation tool. The purchased option possesses relatively low issue cost when the systematic risk is relatively high. Moreover, the value incentive of the purchased option is the highest in the six kinds of executive stock options.