Changes in CEO stock option grants: a look at the numbers

Athanasakou, Vasiliki, Ferreira, Daniel and Goh, Lisa (2022) Changes in CEO stock option grants: a look at the numbers. Journal of Corporate Finance, 75. ISSN 0929-1199

Text (Paper text and tables 2022-02-15 SSRN) - Accepted Version Repository staff only until 11 June 2024. Available under License Creative Commons Attribution Non-commercial No Derivatives. Download (912kB) | Request a copy

• Author

Abstract

We study changes in the number of CEO stock option grants. Despite some evidence of short-term rigidity, the number of options granted changes frequently over time. CEOs of firms with unusual investment patterns subsequently receive fewer stock options as part of their compensation packages. CEOs who hold exercisable deeply-in-the-money options (overconfident CEOs) also receive fewer stock options in subsequent periods. Our results show that past CEO behavior predicts stock option grants. These insights can inform theoretical discussion on option-granting behavior and, more broadly, on the board's re-contracting process.

Item Type:	Article
Official URL:	https://www.sciencedirect.com/journal/journal-of-c...
Additional Information:	© 2022 Elsevier B.V.
Divisions:	Finance
Subjects:	H Social Sciences > HG Finance
JEL classification:	G - Financial Economics > G3 - Corporate Finance and Governance > G30 - General G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J33 - Compensation Packages; Payment Methods M - Business Administration and Business Economics; Marketing; Accounting > M4 - Accounting and Auditing > M41 - Accounting M - Business Administration and Business Economics; Marketing; Accounting > M5 - Personnel Economics > M52 - Compensation and Compensation Methods and Their Effects (stock options, fringe benefits, incentives, family support programs, seniority issues)
Date Deposited:	20 Jul 2022 14:09
Last Modified:	08 Apr 2024 01:48
URI:	http://eprints.lse.ac.uk/id/eprint/115609

Actions (login required)

View Item