Laux, Volker - In: Journal of Financial Economics 106 (2012) 3, pp. 513-526
, the optimal design of stock option vesting conditions in executive compensation is more subtle than conventional views … suggest. For example, I show that long vesting periods can backfire and induce excessive short-term investments. The study … generates new empirical predictions regarding the determinants and impacts of stock option vesting terms in optimal contracting. …