Their terms and conditions are often opaque

It is violently to regular period, as the thunderstorms of summer bursting evening from too much heat. It was enough of two recent cases to add to the atmosphere. The da Vinci of first, a thriving business faces to the greed of his former boss; the EADS then, a group in turmoil to an exercise of options for the less inappropriate for many of its leaders. The figures vary from the simple to the tenfold but that matter over the million, there are more and all occur in the same bag. The Palais Bourbon and less than a year of elections, there is concern. Members, patterns have lost the meaning of the measure and thereby are sawing the capitalist branch on which they are seated. Emotion-inquiry-legislation, the unstoppable sequence is set up. The President of the Republic asked the Minister for the economy "to supervise the system. And, for once, Parliament of left and right unite to shout haro on stock options. The proposal of Edouard Balladur to prevent patterns to exercise as long as they have not left their company appears to be a tobacco in the ranks of the majority, for a new idea to show that the elected cares repress abuse. The Government is considering.

Yet this would be an error. Not that it must protect the system, but because it's the companies themselves to realize that reckless of stock options use made too much damage in opinion but also in the business to be neglected. Not without benefits, stock options are a tool to handle with caution. Therefore, an exercise in self-examination would be much more beneficial than a general law which, to crop each, would penalize others.

Two reasons largely explain the current crisis. On the one hand, the options assigned in the hollow of the crisis of stock market of the 2000s, so at very low prices, can be carried out today (with a tax system to favour four years), in a context of strong fellowship and therefore with very large potential gains. Many are therefore not pray to receive their jackpot. Where spectacular amounts that make the headlines. On the other hand, the system, created originally for small growth companies, has been transposed but also rogue in large groups, such as France abroad, who have seen a new tool, financially interesting to add to the incredible variety which is now the remuneration of company bosses. It stacks happily, in addition to salary, bonuses, multi-year bonus, options, engagement, participation, free and retirement Hat! But, unlike small business leaders of large companies are not sacrificing their immediate compensation for the benefit of long-term compensation, random. They are double winners.

Of course, may be an ethical or moral judgment on the merits and the amount of these payments. Just us economic reasoning on the only instrument of stock options, which focuses today all criticism (but, two years ago, were pensions hats that were targeted).

Initially, stock options were created to allow young growth companies to attract talent that they did not have the financial means to seduce. Silicon Valley California is replete with stories of high level executives come to take the risk of the "start-up" and found themselves millionaires ten years later. Then, with the rise of the theses of the Chicago school on the rule of the creation of shareholder value, has emerged the concept of alignment of the interests of the leader with those of the shareholder. Now, through stock options, patterns and shareholders paddling in the same direction, that of a progression of stock market. This is not necessarily shocking, to the extent that, over long period (three or four years), progression in the stock market reflects quite accurately, off busts, the intrinsic performance of the company.

Attract talent when there is no money, reconcile the objectives of the shareholder and manager, is this still the case for the CAC 40 companies Not really. Since these companies did not need such a tool to seduce their new recruits. Curiously, while in these large groups, widely viewed, the leader's role is by definition more diluted in the technostructure, found levels of concentration in the hands of a man difficult to justify. Antoine Zacharias has been awarded year last about 35 of all of the available stock. Does this mean that it helps him alone 35 of the increase in value of da Vinci When Bernard Arnault is awarded 23 of the stock distributed by LVMH, while it is the first shareholder through his family holding, that the closer its own interests Or this loyalty at his own group

The system of stock options is not adapted to companies whose growth is by definition more low, given their size. Their terms and conditions are often opaque. They are decided by a Board of directors where the leaders almost always receive vital. It is a reward without risk, other than do not touch the cash. It is little related to the intrinsic performance of the CEO. Finally, the inequality of distribution can be destructive to the motivation of the senior management. Numerous studies show that the concept of fairness in wages is one of the first elements of motivation of managers and the cement of the legitimacy of a pattern. All of this without talking about cases of fraud, including to the United States, facilitated by the principle of stock options, which means that there is interest in what stream or low at the time of the award and the highest during exercise a few years later. Where is the alignment with the interests of shareholders Not to mention nor risk of insiders. As pointed out recently Arnaud Lagardère, if a pattern is not initiated, is that it is incompetent!

If the stock keep their virtues for growth companies, therefore they appear less adapted to large enterprises. Except to lock in use in a variety of binding safeguards, but that, to each skid, seem more necessary. Avenues to explore abound, prior approval by the Board of Directors of the exercise of the options is to entrust the management of this heritage to an outside agency, through an exercise of options schedule established for the year.

Therefore, there may be more simple. If important it is to align the interests of a pattern of the shareholder, why not ask him to invest a significant part of his remuneration, in the order of one or two years of wages and to set its return on investment based on its performance, as widely practised investment funds It would in any case the best way to give back to patterns taste for risk, but also the passion of the contractor.