Strategic Timing and Backdating of Executive Stock Option Exercises: Before and After the Sarbanes-Oxley Act

2007 ◽  
Author(s):  
David C. Cicero
Keyword(s):  
Stock Option ◽  
Executive Stock Option ◽  
Sarbanes Oxley ◽  
Before And After

The Adoption and Structure of Executive Stock Option Plans

1999 ◽  
Author(s):  
Michael E. E. Bradbury ◽  
Janice C.Y. Ching ◽  
Yuen Teen Mak
Keyword(s):  
Stock Option ◽  
Executive Stock Option

scholarly journals Discount and premium awards in the context of pre-existing ESOP conditions

2006 ◽  
Vol 3 (2) ◽  
pp. 54-67
Author(s):  
Bruce A. Rosser ◽  
Jean M. Canil
Keyword(s):  
Stock Option ◽  
Shareholder Wealth ◽  
Wealth Effects ◽  
Executive Stock Option ◽  
Major Implication ◽  
Incentive Problems ◽  
The Cost

This study examines interactions between pre-award ESOP restrictive conditions and award discounts/premiums that characterized executive stock option awards in Australia from the mid-1980s to 2000. Shareholder wealth effects at award suggest that (i) shareholders generally do not gain from offering discounts because associated value increments do not exceed the cost of the discount, (ii) premium awards coupled with exercise restrictions appear to be used to ameliorate the risk of CEO opportunism associated with irregular awards, and (iii) shareholders suffer a wealth decrement when premium awards are used to ameliorate the disinvestment incentive of inferior CEO dilution protection. The second of these findings implies risk of CEO opportunism. A major implication is that award discounts/premiums are used to modify the conditions of pre-existing ESOPs that presumably are dated and no longer optimal for addressing current incentive problems. Analyses of the optimality of award discounts/premiums should take this into account.

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