Recursive Options? Calling a Call

We've been shown how equity near bankruptcy behaves like a call option in our Finance II class. We've also been told in some of our integrative thinking classes to consider the models for employee (CEO) compensation to reduce the principle-agent costs / issues resulting from the relinquishing of control from capital investment.

My question is this. Consider the following scenario:

A company is struggling. It's Enterprize Value is low (less than debt) making equity intrinsic value essential zero (or negative) trading like an option.

In order to turn the company around and restructure, the company fires it's current CEO and recruits a new one. In order to motivate the new CEO to turn the company around, the CEO is offered stock options (we'll assume unrestricted for now).

What scenario have I just decribed? The securities that the CEO is holding are essentially call options on call options. That is to say the CEO's derivative, the call option, has an underlying asset which also behaves as an option (the equity behaves like a call option).

... Now assume that the stock is a mining company (which behaves like an option relative to the underlying commodity).

I wonder how you would even begin to model how much these options are worth? While valuing options itself are already quite tricky using models like Black Sholes Martin, I wonder what model would be appropriate for a derivative with recursive properties.

Also, as a financial derivatives joke, I overheard one unfortunate soul ask this question: "Are management stock options calls or puts?"