The Association between Executive Stock Option Plan Changes and Managerial Decision Making

DeFusco, Richard A.; Zorn, Thomas S.; Johnson, Robert R.

doi:10.2307/3666095

Cited by 78 publications

(45 citation statements)

References 10 publications

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“…Several studies correlate compensation measures with ex post stock price performance (e.g., Masson, 1971;Abowd, 1990;Defusco et al, 1991;Kedia and Mozumdar, 2002;Ittner et al, 2003). A major difficulty with this approach is that stock returns have shareholder expectations embedded in them.…”

Section: Introductionmentioning

confidence: 99%

Are executive stock options associated with future earnings?

Hanlon

Rajgopal

Shevlin

2003

Journal of Accounting and Economics

380

110

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Section: Introductionmentioning

confidence: 99%

Are executive stock options associated with future earnings?

Hanlon

Rajgopal

Shevlin

2003

Journal of Accounting and Economics

380

110

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“…Incentives that induce top executives to take a long-term view are likely to result in different choices than those with a short-term focus (DeFusco, Zorn & Johnson, 1991). Executive equity ownership helps to overcome the problem of the 'shortsightedness' of top executives as they will still be eligible for future gains in their companies'…”

Section: Top-executive Compensationmentioning

confidence: 99%

Top executive compensation, regional institutions and Chinese OFDI

Liu

Chizema

2014

Journal of World Business

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Integrating agency and institutional theories, this paper examines the impact of top-executive compensation and regional institutions on the outward FDI (OFDI) of a sample of Chinese-listed firms. The results show that top-executive cash pay and equity ownership have a positive association with OFDI. Differing from previous studies focusing on cross-country institutional variances, we take variations in within-country institutions into account and find that regional institutions in terms of product markets, factor markets and legal systems play an important role in OFDI and positively moderate the governance role of managerial equity ownership.

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“…4 We define regulated industries similarly to Fama and French (1986) and DeFusco et al (1991). We analyze only industrial firms to economize on data collection costs without unduly limiting the generalizability of our results.…”

Section: Identifying Ceo Turnovermentioning

confidence: 99%

Changes in CEO compensation structure and the impact on firm performance following CEO turnover

Blackwell

Dudney

Farrell

2007

Rev Quant Finan Acc

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We document changes in compensation structure following CEO turnover and relate them to future performance. Compared to outgoing CEOs, incoming CEOs derive a significantly greater percentage of their compensation from option grants and new stock grants. The voluntary turnover sample shows similar changes in compensation structure while the forced turnover sample results suggest that new stock grants drive the significant increase in incentive compensation following turnover. Post-turnover performance is positively associated with new stock grants as a percentage of total compensation in the full sample and when analyzing forced and voluntary turnovers separately. We find limited evidence that future operating income is positively associated with option grants following forced turnover. Post-turnover improvement in operating income is positively associated with an increase in new stock grants for the incoming relative to the outgoing CEO.The authors appreciate the comments and suggestions on a much earlier version of the paper titled "Changes in CEO compensation and firm performance following CEO turnover" received from

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The Association between Executive Stock Option Plan Changes and Managerial Decision Making

Cited by 78 publications

References 10 publications

Are executive stock options associated with future earnings?

Are executive stock options associated with future earnings?

Top executive compensation, regional institutions and Chinese OFDI

Changes in CEO compensation structure and the impact on firm performance following CEO turnover

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