Corporations cannot grant stock options as part of pay packages, bonuses, termination agreements or any other form of compensation to upper management. Cash salary levels remain without limit as a private negotiation between upper management and the stockholders.
Why is this important?
Issuing stock options as a major part of management compensation has led to three decades of short-term management approaches focused on the daily value of those options. This has led, in no small part, to the economic distress America is currently in. Banning stock options as compensation would help return a management style focused on long term profitability through growth as opposed to the devastating cost cutting which is the main focus today.
