Pay Daze - Linking pay to performance is harder than it looks. (CFO.com)

"Nearly every public company issued options five years ago, according to The Corporate Library, an independent research firm that analyzes corporate-governance trends. Today, it says, only two-thirds do. "

"Companies are relying more on performance-linked equity, in combination with other forms of pay. "

"The attractiveness of internally based awards — in which the compensation expense can be reversed if the performance methods are not achieved — leads some companies to give them a close look ..."

"Still, internal measures have their advantages. A manager's influence over something as complex as the stock price is quite limited. And arguably, CEOs and other top executives have more control over EBITDA."

"Excessively fine-tuning the overall compensation plan, however, risks making executive pay too complicated to serve as a good motivator. For all their flaws, pay packages based on ordinary options are at least easy to understand."