Valuing Stock Options in a Compensation Package Abridged Sally Jameson, a second-year MBA student at Harvard Business School, was thrilled but confused.

It was late Maygraduation was approaching, and she had finally landed the job of her choice. She had just finished an early morning telephone conversation with Bob Marks, the MBA recruiting coordinator at Telstar Communications, a large, publicly held multinational company.

Mark had offered Ms. Jameson a unique position in operations at Telstar, and from the description, it sounded exactly like the job that she wanted Since her first interview with Telstar, she had been very impressed with the company and its people while Ms.

Jameson was certain that she would accept the job, there was still one unsettled, yes crucial, matter—her compensation.

Sally Jameson » Case Solution

During the conversation with Marks, Jameson had asked what her compensation package would be Marks: Could you explain to me what they are? Executives at Telstar have been eligible to receive stock options for years. Although our stock has performed erratically over the last ten years, the board continues to believe that stock options are the best form of incentive compensation. Because the options represent the right to buy Telstar stock at a set price, after a set period of time, management has an incentive to take actions to move the stock price upward.

Business and Management: Sally Jameson: Valuing Stock Options in a Compensation Package

Several months ago, we had sally jameson valuing stock options in a compensation consulting firm examine our compensation structure. They recommended that we extend eligibility for stock options to all employees as part of our new inventive-based compensation plans.

Thus, the two MBAs that we hope to hire this year will be the first employees who will be offered stock options. Given that this is an experiment, we decided to give MBAs a choice between cash or options. All I know are the details: Professor peter Tufano and Research Associate Forex economic calendar myfxbook Lewittes prepared this case.

HBS cased are developed solely as the basis for class discussion. Certain details have been disguised Cased are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.

Copyright President and Fellows of Harvard College To order copies or request permission to produce material, callwrite Harvard Business School Publishing, Boston, MA auto trade forex softwares, or go th http: If you choose the cash signing bonus, it is taxed at ordinary tax rate?

While Bob Marks sally jameson valuing stock options in a compensation to prefer the cash bonus, Sally Jameson was less sure. Taking out her Wall Street Journal, she noticed that both short-term and long-term.

Telstar options were traded seed Exhibit 1. She also found data on government bill, note, and bond yields that would be useful in her analysis see Exhibit 4.

Sally Jameson | Employee Stock Option | Option (Finance)

As she thought about the problem, she decided to approach it in two steps: Then, she would consider other issues, including the likelihood that she might not stay at Telstar that long. Home Free Essays About Us Contact Us.

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