Over the last years sk options have become an integral part of the compensation of senior managers in Germany: Originating in the USA in the 1950s, this form of compensation gained increasing popularity among German corporations during the 1990s, so that by today far over 100 German listed companies grant sk option plans to their employees. Based on recent research the average German CEO ("Vor­ standsvorsitzender") receives approximately 10% of his salary in form of sk op­ tions. The ongoing globalisations of business practises as well as the boom of the Neuer Markt have been key drivers of this development. Initially, from an economic perspective the increasing importance of sk option plans in the compensation of senior managers has to be welcomed: Assuming that senior managers through their actions have the ability to influence the sk price of their companies, sk options represent a performance based type of pay that im­ proves the incentives to senior managers to create additional shareholder value. However, this perspective often neglects the potential costs created by such an in­ centive instrument. Several research studies suggest that companies in some cases generate additional costs through the granting of sk options that can exceed the benefits created by their incentive effect.