Cost-efficient Performance-Vesting Equity

Skovoroda, Rodion; Bruce, Alistair; Buck, Trevor and Gregory-Smith, Ian (2019). Cost-efficient Performance-Vesting Equity. Economics Letters, 182 pp. 37–39.

DOI: https://doi.org/10.1016/j.econlet.2019.06.002

Abstract

We analyze the incentive effects of the Performance-Vesting Equity (PVE) component of executive pay that is characterized by zero exercise price and performance-contingent vesting. We demonstrate how PVE with upward-sloping convex/concave vesting curves can be a more efficient risk-sharing and incentive alignment device than strictly convex stock options.

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About

• Item ORO ID
• 69548
• Item Type
• Journal Item
• ISSN
• 0165-1765
• Keywords
• Executive compensation; Incentive pay; Performance-Vesting Equity
• Academic Unit or School
• Faculty of Business and Law (FBL) > Business > Department for Accounting and Finance
  Faculty of Business and Law (FBL) > Business
  Faculty of Business and Law (FBL)
• Copyright Holders
• © 2019 Elsevier B.V.
• Related URLs
• • http://eprints.gla.ac.uk/187790/
• Depositing User
• Rodion Skovoroda