Tests of two optimal incentive models for executive stock options

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dc.contributor.authorCanil, J.
dc.contributor.authorRosser, B.
dc.date.issued2011
dc.description.abstractUsing a unique data set, we test theoretical propositions relating to grant size and exercise price in determination of optimal executive compensation. For Hall and Murphy, pay-performance sensitivity does not behave as predicted with respect to CEO risk aversion and diversification, but the latter supports observed grant size while ATM grants exhibit positive abnormal returns as predicted. Consistent with Choe, exercise price is found inversely related to leverage. The unexpected positive relation between grant size and stock volatility is conjectured driven by CEOs’ influencing large grants, which are found associated with weak corporate governance but ameliorated by outside directors.
dc.description.statementofresponsibilityJean M. Canil, Bruce A. Rosser
dc.identifier.citationCorporate Ownership and Control, 2011; 9(1):136-155
dc.identifier.doi10.22495/cocv9i1art9
dc.identifier.issn1727-9232
dc.identifier.issn1810-3057
dc.identifier.orcidCanil, J. [0000-0002-3646-4320]
dc.identifier.urihttp://hdl.handle.net/2440/108283
dc.language.isoen
dc.publisherVirtus Interpress
dc.rightsCopyright status unknown
dc.source.urihttps://doi.org/10.22495/cocv9i1art9
dc.subjectExecutive; stock options; optimal; grant size; exercise price; influence
dc.titleTests of two optimal incentive models for executive stock options
dc.typeJournal article
pubs.publication-statusPublished

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