The Advisors' Blog

This blog features wisdom from respected compensation consultants and lawyers

July 13, 2018

If the Market Crashes? Everyone Into the “Options” Pool…

Broc Romanek

This blog by Performensation’s Dan Walter cracked me up – because he speaks the truth, such as this excerpt:

Ha! I tricked you. Just a couple of paragraphs ago I talked about better linkage of performance goals to LTI. Then I talked about how communications would improve. But, if the market falls away and stock prices drop precipitously, we won’t get either of those. We will see companies leap back into stock options. All of the “in things” like Performance Units and alignment will disappear as fast as the strong stock prices. When prices go low, stock option numbers will go high. Count on it.

The first two of these changes will happen gradually. I expect two or three years, at best. The change will be so slow that you may not even notice it (don’t worry I’ll remind you.) The third change, if it happens, will happen so quickly that all of us will forget about the other two for a very long time. If you had to add a fourth “big change” what would it be?