BULLS & BEARS: Shift to restricted stock not always good news
In recent decades, companies accelerated their use of stockbased awards as a compensation method. The key argument for these compensation plans was that they align managerial interests with stockholder interests. The modern stockoption plan originated at the young technology firms-which, short on cash, instead issued equity to compensate and motivate employees. As the riches began to flow, option programs escalated at larger firms that weren’t cash poor but proclaimed the alignment-of-interests theme. The option largesse was encouraged by accounting fantasy,…