Cost-efficient Performance-Vesting Equity

Rodion Skovoroda, Alistair Bruce, Trevor Buck and Ian Gregory-Smith ()

Economics Letters, 2019, vol. 182, issue C, 37-39

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.

Keywords: Executive compensation; Incentive pay; Performance-Vesting Equity (search for similar items in EconPapers)
JEL-codes: G3 J3 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:182:y:2019:i:c:p:37-39

DOI: 10.1016/j.econlet.2019.06.002

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