“ The late 1980s and 1990s: The second surge
Performance-based pay: A renewed push began in the late 1980s to link executive pay more closely to performance.
Accounting rules: Changes to accounting rules, particularly in the 1990s, made it easier and more favorable for companies to grant options, leading to their widespread adoption for top executives.
"Aggressive use": This period saw a dramatic increase in the number of stock options granted, with some studies showing that by the late 1990s and early 2000s, options were a dominant form of equity compensation for CEOs in many firms. “ Many of us bought Brk decades ago because we knew Buffett wouldn’t grant options for 2-4 percent of the company to execs annually. That’s why buying back our shares in 2005 was very obvious.

Berkshire Hathaway FAQ

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