The value of stock option grants at the largest U.S. corporations have fallen significantly in recent years, and particularly in 2005, as companies reduce the number of options granted and the number of employees receiving them, according to the results of a recent study by Watson Wyatt Worldwide.
As the figures below show, Watson Wyatt estimated that the total economic value (using the Black-Scholes formula) of stock options granted to all employees declined 71% between 2001 and 2005:
Estimated Total Stock Option Grant Value for S&P Composite 1500 (in billions of dollars)
- 2001: $137
- 2002: $87
- 2003: $59
- 2004: $59
- 2005: $40
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