Stock options are increasing in popularity among company pay plans worldwide, according to a study conducted by management consultant Towers Perrin.
Stock Options Around the World
, indicates that, while long-term incentive (LTI) plans featuring stock options have been very common in U.S., U.K. and Canadian companies since 1997, companies in other countries are now moving swiftly to include stock options as a key component of compensation.
Between now and 2003, Argentina, Germany, Italy and Spain are expected to show a 50 per cent increase in LTI programs. The number of such programs is expected to double in South Korea and more than triple in Mexico and Japan.
The Towers Perrin study also shows that, regardless of the type of company, stock options are more widely used than performance plans, restricted stock plans or any other LTI program.
However, in countries with a history of stock options and share ownership (the U.S., the U.K. and Canada), stock options are losing some of their appeal, given recent stock market tumbles. Accordingly, in these countries, stock options may be less effective as an incentive to perform.