When do high‐level managers believe they can influence the stock price? Antecedents of stock price expectancy cognitions

Dunford, Benjamin B.; Boswell, Wendy R.; Boudreau, John W.

doi:10.1002/hrm.20332

Cited by 10 publications

(4 citation statements)

References 73 publications

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“…This effect was especially true in the 1990s as the proportion of SOs reached one-third of total managerial compensation (Hall and Liebman, 1998; Murphy, 1999). Similar results were observed in 2000s when SOs became the largest single component of top management rewards (Dunford et al , 2010; Hall and Murphy, 2002), and nearly half of all Fortune 100 companies offered SOs (Ericson, 2004; Hempel and Fay, 1994).…”

Section: Introductionsupporting

confidence: 70%

Alignment vs rent-extraction effects of stock options. A conceptual model

Catuogno

Saggese

Sarto

2016

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Purpose – This paper aims to develop a conceptual model that systematically interprets how key\ud governance factors drive the alignment and the rent-extraction effects of executive stock options (SOs)\ud as proxied by plan characteristics.\ud Design/methodology/approach – The authors draw on the review of 202 articles published in\ud international academic journals. They collect data from library databases and by hand-searching and\ud citation-tracking relevant papers on the topic. Moreover, the authors review and classify the studies as\ud related with determinants or proxies of alignment and rent-extraction effects of SOs.\ud Findings – The conceptual model systematically interprets the results of the literature review and\ud identifies the relationships between archetypes, driving factors and proxies of the rent/alignment effect\ud of executive SOs. It highlights that, given ownership archetypes, effective (ineffective) governance\ud practices drive the alignment (rent) aim of SOs as proxied by the optimal (non-optimal) plan design.\ud Practical implications – This paper supports compensation committees in selecting the SO\ud characteristics that better attract investors and retain executives. Moreover, it guides future policy\ud making interventions aiming at mitigating the rent-extraction effect of SOs.\ud Originality/value – The paper highlights that the governance determinants of SO aims can be\ud effectively classified as archetypes or drivers of rent-extracting and aligning outcomes of these\ud remuneration tools. Moreover, it offers a useful framework to guide future research efforts by providing\ud a comprehensive interpretation of the relationships between ownership archetypes, driving factors and\ud proxies of SO effects

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Section: Introductionsupporting

confidence: 70%

Alignment vs rent-extraction effects of stock options. A conceptual model

Catuogno

Saggese

Sarto

2016

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“…Specifically, contingent pay should increase the belief in control over the supplier selection situation. Dunford et al () recently found that contingent pay (i.e., offering stock options) positively influences perception of control (i.e., the expectancy that effort will influence stock performance), regardless of one's ability to control the situation. This implies that Shapira's () postdecisional control concept can be integrated with BAM.…”

Section: Theoretical Background and Hypothesesmentioning

confidence: 99%

Supplier Selection Behavior Under Uncertainty: Contextual and Cognitive Effects on Risk Perception and Choice

2014

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Buyers often make supplier selection decisions under conditions of uncertainty. While the analytical aspects of supplier selection are well developed, the psychological aspects are less so. This paper uses literature from supply chain management and behavioral decision theory to propose the following: While attributes of a purchase category (i.e., category difficulty, category importance, and contingent pay) influence risk perceptions, cognitive processes exist that additionally influence risk perceptions and affect a supply manager's choice. We conducted a supplier selection behavioral experiment with practicing managers to test the model's hypotheses. When the context involves an important or difficult sourcing category, higher risk perceptions exist that increase preferences for a supplier with more certain outcomes, even when that decision has a lower expected payoff. However, the presence of contingent pay decreases risk perceptions through higher perceived supplier control. Also, we find that a manager's risk propensity increases preferences for a supplier with less certain outcomes regardless of perceived risk. Our model and results provide a theoretical framework for further study into the cognitive aspects of supplier selection behavior and provides insight into decisional biases that practicing supply chain managers may be subject to.

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“…Stock price as an indicator to measure the success of a company's management, where market power on the stock market is indicated by the sale and purchase of the company's shares in the capital market (Cao et al, 2002;Dunford et al, 2010;Fu et al, 2020 ;Yin et al, 2020). The transaction conditions and conditions are based on investors' observations of the company's achievements in increasing profits.…”

Section: Introductionmentioning

confidence: 99%

Effect of Return On Assets, Return On Equity and Earning Per Share on the price of shares at PT. Gajah Tunggal tbk

Wang

2020

j. il.adm.publik.

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This study aims to determine the effect of Return on Assets, Return on Equity and Earning Per Share on stock prices at PT. Gajah Tunggal Tbk. The method used was explanatory research with a sample of 8-year financial statements in the form of a panel PT. Gajah Tunggal Tbk. The analysis technique uses statistical analysis with regression testing, correlation, determination and hypothesis testing. The results of this study Return on Assets have a significant effect on stock prices by 53.4%, hypothesis testing obtained significance of 0.040 <0.05. Return on Equity has a significant effect on stock prices by 83.0%, hypothesis testing obtained significance of 0.002 <0.05. Earning Per Share has a significant effect on the stock price of 97.9%, the hypothesis test obtained significance 0,000 <0.05. Return on Assets, Return on Equity and Earning Per Share simultaneously have a significant effect on the stock price of 99.5%, the hypothesis test obtained significance 0,000 <0.05.

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When do high‐level managers believe they can influence the stock price? Antecedents of stock price expectancy cognitions

Cited by 10 publications

References 73 publications

Alignment vs rent-extraction effects of stock options. A conceptual model

Alignment vs rent-extraction effects of stock options. A conceptual model

Supplier Selection Behavior Under Uncertainty: Contextual and Cognitive Effects on Risk Perception and Choice

Effect of Return On Assets, Return On Equity and Earning Per Share on the price of shares at PT. Gajah Tunggal tbk

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