Not according to this study of the link between stock compensation and performance The idea of using stock-based compensation to recruit and retain top talent has spread rapidly from the computer industry to other business sectors. Business leaders in a wide spectrum of industries have assumed that if companies as successful as Hewlett Packard and Intel reward top executives by giving them an equity stake in the company, they, too, could improve performance by offering stock options. A study by two University of California, Irvine professors challenges this assumption and gives businesses reason to reevaluate the corporate stampede toward stock-based compensation that has made multimillionaires out of many CEOs in recent years. But this doesn't seem to make much sense because, given the results of our study, it appears that companies that are more generous with stock options don't see better performance.
Many computer companies are very successful, but for reasons other than the way they pay.
On the contrary, they tend to have far more cash and less debt than companies in other industries. Computer executives who receive stock-based compensation do not end up with the larger stake in the firm that shareholders want them to have so they will work harder to protect their interests. That's because executives, concerned about the risk of tying up too much of their wealth in one firm, tend to sell their shares in the company they run rather than to hang onto them. Wallace and Talmor noted that many companies see stock options as an inexpensive way to reward top executives, but their study shows that relying too heavily on stock options may not be the best strategy for building a successful business.