CEO pay has gone through remarkable changes over the past two decades. The most striking new features have been the increased use of stock options in the early 2000s, and of restricted stock since then. Both forms of stock-based compensation are intended to resolve the agency problem that occurs when CEOs do not act in the best interests of stockholders, but each has its advantages and limitations. In this instalment of Organizational Performance, we discuss the history of their use and similarities and differences between the two, and argue that both are often overused. Bonuses based on strategic goals, on the other hand, may be underused. We conclude with a contextual approach to guide boards of directors in making choices among the forms of CEO compensation—stock options, restricted stock, salary, and bonus—to incentivize CEOs to work toward maximizing organizational performance. Briefly, stock options are most appropriate for growth firms, and restricted stock for stable firms. Both forms of stock-based compensation are more appropriate for new than for long-tenured CEOs.

在过去的二十年里，CEO 的薪酬经历了显着的变化。最引人注目的新功能是在 2000 年代初增加了对股票期权的使用，以及此后限制性股票的使用。两种形式的股票薪酬都是为了解决当 CEO 不以股东的最大利益行事时出现的代理问题，但每种形式都有其优点和局限性。在本期《组织绩效》中，我们讨论了它们的使用历史以及两者之间的异同，并认为两者都经常被过度使用。另一方面，基于战略目标的奖金可能没有得到充分利用。最后，我们用一种情境方法来指导董事会在 CEO 薪酬形式——股票期权、限制性股票、薪水、和奖金——激励 CEO 努力实现组织绩效最大化。简而言之，股票期权最适合成长型公司，而限制性股票最适合稳定型公司。两种基于股票的薪酬形式都更适合新任 CEO，而不是长期任职的 CEO。