In recent years the use of share-based payment has developed progressively, not only in the US but in Denmark as well. This escalating usage combined with the fact that regulations in Denmark as well as in the EU has increased threw the last couple of years. From the stockowners point of view the increase in regulations has made the Financial Statement more informed and detailed in general regarding share-based payment. The regulations have mainly concerned companies quoted on the Copenhagen Stock Exchange which is why the topic of this graduate thesis only involves companies quoted on the Copenhagen Stock Exchange. Furthermore the main issue is in which way the entities are obligated to disclose information that enables users including stockowners of the financial statements to understand the nature and extent of the share-based payments as well as to understand how the fair value of the payments during the period is determined. Beside the regulations the committee of the Copenhagen Stock Exchange has compiled a report listing a serious of recommendations concerning corporate governance. These recommendations have no further effect and are not sanctioned in any essential way. After the European Commission stated the “Comply or explain”- principle the companies on the stock exchange are now obligated to follow these recommendations or explain the reason why they are not. There has been extensive media coverage of share-based payment and mainly because of the values the share-based payments has increased too. This was seen in the case of Roskilde Bank, where a large number of executive stock options were used in the remuneration of Niels Valentin Hansen, the former chief executive officer. A few years after the same stock options had already increased in value, and were worth more than 100 million DKK. The use of share-based payments is now popular in general, and is seen used very often in companies on the stock exchange. No doubt there is many advantages by the use of share-based payment, but none the less there does exist almost as many disadvantages. The main problem of this graduate thesis is on one hand that the regulations regarding the disclosure of information of share-based payments has not been seen fully effective threw out the financial statements making it that more difficult for the users including stockowners to fully understand the effect, nature, terms and conditions of each arrangement. On the other hand that this lack of disclosure is seen in general regarding companies on the stock exchange most often concerning the share-based payments regulations and recommendations. The fact that the use of share-based payment is now so common and the values are often sky high that it gets that more important for the users to fully understand the effect from the share-based payment. In the case of Roskilde Bank, the stockowners never agreed on the specific terms regarding the contract with the former director, Niels Valentin Hansen. This was compiled and accepted by the board of directors in 2003. The new regulations and recommendations will affect this process, but as the conclusion of the topic will reveal the impact is not going to completely comprehend the executive board from choosing ways of strategy and investment that are opportunistic. This is why the topic analyzes if this is the only possible way of remunerate the executive board. What is impossible to calculate, but that more interesting, is the expected effect of the use of sharebased payments? No one really knows which is why the last topic concerns the expected impact of the use which will show that there are no significant relation between the use of share-based payments and higher profits along with the increase of the total value of the company. There are other ways to remunerate the executive board. For an example bonuses that are based upon the top or bottom result of the company and that can in many ways compensate and therefore give the board of directors the motivation to work harder and in same direction as the stockowners would prefer. The board of directors can also reduce the opportunistic behavior of the executive board by changing the guidelines that concerns the preparation of the share-based payment to the executive board.
|Uddannelser||Cand.merc.aud Regnskab og Revision, (Kandidatuddannelse) Afsluttende afhandling|