descriptionIssue Brief Posted on: 10/07/2009

Exchanging Underwater Stock Options

Takis Makridis

This paper, which was published by The Corporate Board, discusses the economic factors driving stock option exchanges for companies that want to re-establish broken incentives and retention benefits. It also reviews the questions companies must consider before proceeding with an exchange, as well as the key requirements for valuing and exchanging an underwater option.

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