Question

Regarding the valutation of a Peer Option

Can anyone help me in the valuation of a peer option. That is, the amount of options hold by management there can be exercised are and function of how well the company is performing relative to a peer group. Thus the valuation needs to take into account the expectations to where the company will be in 3 years time among a peer group.

also the performance measure is the marginal return relative to the peer group members