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The Value and Incentives of Option-based Compensation in Danish Listed Companies

Author

Listed:
  • Bechmann, Ken L.

    (Department of Finance, Copenhagen Business School)

  • Jørgensen, Peter Løchte

    (Department of Management)

Abstract

Over the last decade the Danish corporate environment has experienced a significant increase in the use of option-based compensation (OBC). This and many other facts are documented in the present paper which provides the first insights into the characteristics of the option and warrant contracts issued by the complete sample of Danish companies listed on the Copenhagen Stock Exchange. A newly constructed database containing all publicly available information on details of Danish OBC contracts allows us to present, for example, results regarding contract values at an aggregated as well as at firm, personnel group, and individual level. The paper also contains a section which discusses and presents evidence on the incentive effects provided by the option-based compensation contracts adopted by Danish listed companies.

Suggested Citation

  • Bechmann, Ken L. & Jørgensen, Peter Løchte, 2003. "The Value and Incentives of Option-based Compensation in Danish Listed Companies," Working Papers 2003-2, Copenhagen Business School, Department of Finance.
    • Handle: RePEc:hhs:cbsfin:2003_002
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    File URL: http://openarchive.cbs.dk/cbsweb/handle/10398/7150
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    References listed on IDEAS

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    More about this item

    Keywords

    Option-based compensation; executive pay; disclosure requirements; valuation; incentives;
    All these keywords.

    JEL classification:

    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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