Patterns of stock option exercise in the United States

  • Steven Huddart
Part of the The New York University Salomon Center Series on Financial Markets and Institutions book series (SALO, volume 4)


Stock options granted by an employer corporation to its employees offer many benefits. They:
  1. (i)

    provide optionees with incentives to increase the stock price of the firm;

  2. (ii)

    serve as ‘golden handcuffs’ that bind optionees to firms during the vesting period;

  3. (iii)

    allow optionees to recognize income at times that coincide with favorable tax treatment or personal liquidity needs; and

  4. (iv)

    may be treated as ‘off income statement compensation’ by the employer for financial statement purposes.



Stock Price Stock Option None None Strike Price Early Exercise 
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Copyright information

© Springer Science+Business Media Dordrecht 1999

Authors and Affiliations

  • Steven Huddart
    • 1
  1. 1.Duke UniversityUSA

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