We use unique and proprietary data to investigate the design of executive stock option (ESO) contracts of large European firms. We document a large heterogeneity in the ESO plan design. We then construct a score of the CEO friendliness of the plan design and study the relationship between this...

What determines how top managers value their executive stock options? We explore this question empirically by using a unique survey data set which combines subjective option valuation data with a wide set of individual-level variables. In contrast to theoretical predictions, individuals in our...