Bosses now prefer to be paid in share options. The average chief executive of one of America’s top 200 firms would take home just over $750,000 in gold. In fact, in 1998 he made a pre-tax profit of $8.3 m by exercising executive share options, which give the right to buy a fixed number of his company’s shares at a fixed price in what is now a rising market. At the end of last year, he also had total unrealized profits on stock options of nearly $50m. But put to one side questions of justice and inequality. Force down the thought that the chief executive’s enormous share options may demoralize the deputy chief executive and make the company harder to manage. Ignore the bleating bondholder, who sees his risk rise as companies borrow to buy back shares to give to executives. The fundamental question is whether share-option schemes are doing what they were designed to do: aligning the interests of managers with those of owners, motivating bosses to do their level best by shareholders.