On efficiency of executive stock options incentives

The principal-agent model of executive compensation is of central importance to the modem theory of the firm and corporate governance. This paper is concerned with Executive Stock Option. Some relations between Executive Stock Options and CEO incentives are explored. We study efficiency of Executive Stock Options incentives. In general, Executive Stock Options provides incentives to CEO, but these incentives are affected by many factors, such as market environment, risks of the firm, and so on.