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Contract Renegotiation and the Optimality of Resetting Executive Stock Options

Acharya, Viral V. et al.
NYU Faculty Digital Archive · Papers
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multidisciplinary
Recent empirical work has documented the tendency of corporations to reset strike prices on previously-awarded executive stock option grants when declining stock prices have pushed these options out-of-the-money. This practice has been criticized as counter-productive since it weakens incentives pre
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