If the SEC Measured CEO Pay Packages Properly, They Would Look Even More Outrageous

Harvard Business

In the case of stock options, the EFV formula is typically a Black-Scholes-Merton option-pricing model that, rooted in the “efficient markets hypothesis,” assumes that changes in a company’s stock-price exhibit a log-normal distribution and thus predicts that most stock-price changes will be very small.

The Comparing Trap

Harvard Business Review

Robert Merton was 46 when he won the award. He and two other economists created the trading process called Black-Scholes that impacted the ways financial markets were informed and influenced. Merton had the office on the other side of my office. Bob Merton was as gracious and supportive as the colleague I mentioned earlier.