Stocking up: Executive optimism, option exercise, and share retention

Sen, Rik; Tumarkin, Robert

doi:10.1016/j.jfineco.2015.08.001

Cited by 39 publications

(21 citation statements)

References 43 publications

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“…Next, we use the identification method of managerial biases proposed by Sen and Tumarkin (2015). Instead of analyzing executives' option exercise behavior, this method examines executives' stock holdings.…”

Section: Robustness 41 Alternative Measures Of Managerial Biasesmentioning

confidence: 99%

“…Instead of analyzing executives' option exercise behavior, this method examines executives' stock holdings. In particular, Sen and Tumarkin (2015) show theoretically that a manager 30 We focus on the choice between rate-increasing PSD and straight debt here to save space. Our previous results indicate that there is no significant correlation between managerial biases and mixed or rate-decreasing PSD.…”

Section: Robustness 41 Alternative Measures Of Managerial Biasesmentioning

confidence: 99%

“…One notable difference between the Share Retainer variable proposed by Sen and Tumarkin (2015) and the longholder definition by Malmendier and Tate (2005a) is that Share Retainer does not assume that the behavioral bias is a time-invariant, personal characteristic of the executive.…”

Section: Robustness 41 Alternative Measures Of Managerial Biasesmentioning

confidence: 99%

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Managerial Biases and Debt Contract Design: The Case of Syndicated Loans

et al. 2020

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Section: Robustness 41 Alternative Measures Of Managerial Biasesmentioning

confidence: 99%

Section: Robustness 41 Alternative Measures Of Managerial Biasesmentioning

confidence: 99%

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Managerial Biases and Debt Contract Design: The Case of Syndicated Loans

et al. 2020

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“…We then use these subjective prices under endogenous optimal exercise policies to price ESOs to firms. Heron and Lie (2007) and Eikseth and Lindset (2011) studied ESOs backdating, Sen and Tumarkin (2014) looked at behavioural aspects of executives' ESOs exercise policies, Ittner et al (2003) studied performance vested ESOs, and Palmon et al (2008), executives' effort aversion. Cvitanić and Karatzas (1992) develop a duality technique to solve the constrained consumption/investment problems by transforming the original constrained problems into auxiliary unconstrained problems.…”

Section: Introductionmentioning

confidence: 99%

Non-Transferable Non-Hedgeable Executive Stock Options Pricing

2014

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“…We take this timing difference into account when matching. We also use matching algorithms developed by Sen and Tumarkin (2015) that take into account the possibility of misspelling, incorrect name order, nick names, omissions (of middle name, for example), and give extra weight to phonetic structures that appear infrequently. To insure accuracy of the matches, we also compare CUSIP and director birth year, and we manually go through all machine-matched pairs to uncover errors.…”

Section: Datamentioning

confidence: 99%

Three essays on corporate governance

Chen¹

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This thesis consists of three essays on different internal and external corporate governance mechanisms. The first essay examines internal corporate governance by independent directors. It studies exogenous events that temporarily distract independent directors, including illnesses and material events at their external professional positions. The study finds that preoccupied independent directors become less active and committed (lower board attendance, less trading in firm stocks and more frequent board departures). Firms with preoccupied directors have lower firm value, operating performance, M&A profitability, accounting quality and CEO pay-performance sensitivity, especially when directors have important monitoring roles or firms require greater director attention. The second essay focuses on external auditors. The study exploits exogenous attention shocks to assess the value of auditors. When an audit office is temporarily distracted, some of its clients experience a sharp decline in auditor attention (i.e., the treatment firms) while some do not (i.e., the control firms). It finds that the treatment clients to experience significantly more negative market reaction than control clients, especially if the distraction is strong or the clients are relatively unimportant to the audit office. In the longer term, auditor distraction causes higher levels of earnings management, crash risk, stock return volatility and directors' workload. This last finding links back to board of directors, which is the internal corporate governance mechanism examined in the first essay. The third essay is related to the market for corporate control. This study examines the role of firm-level experience in the context of divestitures. It finds that divesting firms that have recent divestiture experience are more likely to sell peripheral or underperforming units, and to divest during industry merger waves. They earn higher returns on divestiture announcement, have stronger operating performance post-divestiture, tend to reinvest sale proceeds in expansion programs using acquisitions (especially value-creative ones), and are less likely to be targeted in acquisitions in the future. Importantly, divestiture experience at the firm level dominates other measures of experience, including divestiture experience of CEOs or boards, and experience in acquisitions. Declaration relating to disposition of project thesis/dissertation I hereby grant to the University of New South Wales or its agents the right to archive and to make available my thesis or dissertation in whole or in part in the University libraries in all forms of media, now or here after known, subject to the provisions of the Copyright Act 1968. I retain all property rights, such as patent rights. I also retain the right to use in future works (such as articles or books) all or part of this thesis or dissertation. I also authorise University Microfilms to use the 350 word abstract of my thesis in Dissertation Abstracts International (this is applicable to doctoral theses only). …...

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Stocking up: Executive optimism, option exercise, and share retention

Cited by 39 publications

References 43 publications

Managerial Biases and Debt Contract Design: The Case of Syndicated Loans

Managerial Biases and Debt Contract Design: The Case of Syndicated Loans

Non-Transferable Non-Hedgeable Executive Stock Options Pricing

Three essays on corporate governance

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