Estimating the Cost of Executive Stock Options: Evidence from Switzerland

It is often argued that Black-Scholes (1973) values overstate the subjective NEWLINE value of stock options granted to risk-averse and under-diversified executives. NEWLINE We construct a “representative” Swiss executive and extend the certainty- NEWLINE equivalence approach presented by Hall and Murphy (2002) to assess NEWLINE the value-cost wedge of executive stock options. Even with low coefficients NEWLINE of relative risk aversion, the discount can be above 50% compared to the NEWLINE Black-Scholes values. Regression analysis reveals that the equilibrium level NEWLINE of executive compensation is explained by economic determinant variables NEWLINE such as firm size and growth opportunities, whereas the managers’ pay-forperformance NEWLINE sensitivity remains largely unexplained. Firms with larger NEWLINE boards of directors pay higher wages, indicating potentially unresolved NEWLINE agency conflicts. We reject the hypothesis that cross-sectional differences in NEWLINE the amount of executive pay vanish when risk-adjusted values are used as NEWLINE the dependent variable

Chemotherapy with BCNU in recurrent glioma: Analysis of clinical outcome and side effects in chemotherapy-naïve patients

Background: To date, standardized strategies for the treatment of recurrent glioma are lacking. Chemotherapy with the alkylating agent BCNU (1,3-bis (2-chloroethyl)-1-nitroso-urea) is a therapeutic option even though its efficacy and safety, particularly the risk of pulmonary fibrosis, remains controversial. To address these issues, we performed a retrospective analysis on clinical outcome and side effects of BCNU-based chemotherapy in recurrent glioma. Methods: Survival data of 34 mostly chemotherapy-naïve glioblastoma patients treated with BCNU at 1st relapse were compared to 29 untreated control patients, employing a multiple Cox regression model which considered known prognostic factors including MGMT promoter hypermethylation. Additionally, medical records of 163 patients treated with BCNU for recurrent glioma WHO grade II to IV were retrospectively evaluated for BCNU-related side effects classified according to the National Cancer Institute Common Toxicity Criteria for Adverse Events (CTCAE) version 2.0. Results: In recurrent glioblastoma, multiple regression survival analysis revealed a significant benefit of BCNU-based chemotherapy on survival after relapse (p = 0.02; HR = 0.48; 95 % CI = 0.26–0.89) independent of known clinical and molecular prognostic factors. Exploratory analyses suggested that survival benefit was most pronounced in MGMT-hypermethylated, BCNU-treated patients. Moreover, BCNU was well tolerated by 46 % of the 163 patients analyzed for side effects; otherwise, predominantly mild side effects occurred (CTCAE I/II; 45 %). Severe side effects CTCAE III/IV were observed in 9 % of patients including severe hematotoxicity, thromboembolism, intracranial hemorrhage and injection site reaction requiring surgical intervention. One patient presented with a clinically apparent pulmonary fibrosis CTCAE IV requiring temporary mechanical ventilation. Conclusion: In this study, BCNU was rarely associated with severe side effects, particularly pulmonary toxicity, and, in case of recurrent glioblastoma, even conferred a favorable outcome. Therefore BCNU appears to be an appropriate alternative to other nitrosoureas although the efficacy against newer drugs needs further evaluation