Effect of personal taxes on managers’ decisions to sell their stock

Why do insiders trade? Evidence based on unique data on Swedish insiders

“…These interesting findings suggest that insiders exhibit similar behavioral biases as regular investors (Shefrin and Statman, 1985;Odean, 1998;Grinblatt and Keloharju, 2001). We also find that tax burden associated with the selling of insider stockholdings deters insiders from selling these stocks, thereby supporting the result reported by Jin and Kothari (2008) for CEOs' selling of vested equity.…”

The Effect of Overconfidence on the Sensitivity of CEO Wealth to Equity Risk

“…One disadvantage is that, to use this measure, researchers need to collect detailed information on each of the annual option grants that comprise the portfolio of the CEO. In addition, Jin and Kothari (2008) find that some CEOs do not exercise deep in-the-money options because of tax considerations rather than overconfidence. This measure has been used in Malmendier and Tate (2008);and Malmendier et al (2007); among others.…”

“…One disadvantage is that it is likely to be noisy. This measure has been used in Hribar and Yang (2006) and Jin and Kothari (2008), and is the one that we use in this paper.…”

“…We measure CEO overconfidence using press data as in Malmendier and Tate (2008). This measure has also been used in Hribar and Yang (2006) and Jin and Kothari (2008). Specifically, we search for articles published in The American Banker that characterize a sample CEO as confident or cautious.…”

Combined MCDM techniques for exploring company value based on Modigliani–Miller theorem

“…Lee and Gordon (2005) stated that due to the influence of personal income tax and GDP, lowering the tax rate causes firms to generate higher cost of capital to invest or enhance entrepreneurship or related activities. Jin and Kothari (2008) pointed out that personal income tax has a significant effect on CEOs' decision to sell stocks; company tax and management decisions will influence their strategies. The above researches show that cash flow is influenced by EBIT, T c and T ps .…”