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U.S. executive pay practices are moving in the direction of the kind of long-term incentives used extensively in Europe, according to a new Hay Group executive comp study. While the vast majority of U.S. and European companies emphasize long-term incentive plans for the senior executives, the most common compensation vehicle– stock options–is designed very differently in Europe than it is in the U.S. Most U.S. companies issue stock options without tying them to any additional performance measures, whereas their European counterparts insist on executives meeting additional performance conditions for vesting.

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