The topic of executive compensation generates heated discussion. And, because stock options have become the fastest growing segment of executive pay, performance-related pay in particular attracts high-decibel debate. Stock options now account for more than half of total CEO compensation in the largest U.S. companies and about 30% of senior operating managers’ pay. Options and stock grants also constitute almost half of directors’ remuneration.
A version of this article appeared in the March–April 1999 issue of Harvard Business Review.
