Introduction
For many board members, executives and shareholders, pay for
performance remains a work in progress. Shareholders in particular,
along with their advisors, most prominently ISS, have recently
focused on long term incentives, making their view known that stock
price change alone may not constitute sufficient performance
conditioning on long term incentives (e.g. stock options,
restricted stock units, etc.) for them to support an issuer's
compensation practices. This contrasts with the view held by many
directors and executives, that options are intrinsically
performance conditioned since there is no reward unless the
company's stock price increases and shareholders benefit.
Certainly competitive compensation in some industries, and
especially among smaller issuers, relies on the use of time vested
stock options to provide long term incentive. Since directors are
tasked with setting executive compensation policies that serve the
interests of both
