Speaking of Gillmor (and of market signals) he did a fine piece on options and executive compensation back in May.
In their 2003 book, ‘In the Company of Owners,’ Joseph Blasi, Douglas Kruse and Aaron Bernstein argue for wider stock ownership among employees. After studying options grants to top executives and the rank-and-file, they concluded that companies granting more to the top bosses gained nothing — in terms of share-price improvements over three years from the date the options were granted — over companies that spread the wealth.
Worse,’ they wrote, ‘the firms whose corporate chieftains were most likely to take a bigger share had sub par performance to begin with. Since the extra ownership made no difference, the shareholders with the greediest CEOs were just throwing good money after bad.’
Keep options. But aim them where they’ll do some genuine good — with the people in the trenches. They’re the ones who do the hard work.
Exactly
