Executive Stock-Based Compensation: A Case Study in Valuing Employee Stock Options and Restricted Stock Issues in a Breach of Contract Case

摘要: In this case study, the former CEO of a large telecommunication company filed lawsuit against her employer that alleged company’s contract breach resulted in loss ESO grants and diminished value vested ESOs she held at time breach. The executive also alleges prevented from receiving restricted stock shares believes was entitled to under with employer. paper, I present an application Shapiro O’Connor (2001) modified Black-Scholes (B-S) Hull-White (2002) binomial lattice tree employee option (ESO) valuation models employment damages. addition valuation, paper illustrates issues provides discussion approaches used account for unique related arise litigation. study importance incorporating specific factors, such as plaintiff's historical exercise rates firm forfeiture probabilities, into models.