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The Nasty Truth about CEO Pay

Harvard Business Review

JUNE 3, 2011

Black-Scholes Valuation based on stock price at issue. Black-Scholes Valuation based on stock price at issue. If the incentive compensation was given in stock options, Thrill-a-Minute Tom would end up with options he could exercise for a profit of $11 million as of May 2011 versus zero for Steady Eddie.

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Black-Scholes CEO Price Bottom-up 14
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Stop Trying to Predict Which New Products Will Succeed

Harvard Business Review

JANUARY 15, 2014

Worse still, we will punish employees even if they do everything right, and create incentives to avoid unpredictable products, even though these products are essential for growth. Outcomes will usually be much worse than predicted, and we will waste design, production, and distribution resources.

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Black-Scholes Productivity Products CAPM 8
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