The way I look at it, executive stock options aren't to reward behavior, they're to ensure loyalty. It's normal for any human being to feel more empathy for ha

The way I look at it, executive stock options aren't to reward behavior, they're to ensure loyalty. It's normal for any human being to feel more empathy for hard-working employees that they work with every day than shareholders who are more distant and who contribute in a passive way. Stock options give CEOs a large financial incentive to place the interests of stockholders above those of employees whenever those come into conflict (for instance, in decided whether to use profits to increase compensation or increase dividends). Anyways, that's my theory of why large executive stock bonuses might be a good for shareholders despite unintended consequences like decreased risk taking.