Cost-efficient performance-vesting equity

Skovoroda, R., Bruce, A., Buck, T. and Gregory-Smith, I. (2019) Cost-efficient performance-vesting equity. Economics Letters, 182, pp. 37-39. (doi: 10.1016/j.econlet.2019.06.002)

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We analyse the incentive effects of the Performance-Vesting Equity (PVE) component of executive pay that is characterised 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.

Item Type:Articles
Glasgow Author(s) Enlighten ID:Buck, Professor Trevor
Authors: Skovoroda, R., Bruce, A., Buck, T., and Gregory-Smith, I.
College/School:College of Social Sciences > Adam Smith Business School > Management
Journal Name:Economics Letters
ISSN (Online):0165-1765
Published Online:05 June 2019
Copyright Holders:Copyright © 2019 Elsevier
First Published:First published in Economics Letters 182: 37-39
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher

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