How about establishing a cash-only pay program along w. a parallel share ownership guideline?
Inevitably, top executives tend to be the people w. alot of service and many years' worth of equity grants in their portfolios. Given the uncertainty principle, and in the absence of diversification, executives must value each subsequent grant at an ever-heavier discount. So we expense millions of dollars worth of grants, that are instantly devalued in the eyes of the recipients. Why do this? So inefficient!
Usually the reasoning goes that the top executives must signal the market via personal holdings of the company's stock. So this goal may be accomplished via share ownership guidelines!
This has the added benefit of each transaction being done via public market but still must be disclosed as an insider transaction.
Now, what is the first thing that comes to your mind when you see lots of share purchases being done by insider executives? Good value! Must be a good deal if insiders are out there buying shares, right?
Its a win win.
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