The Value-relevance of Stock Options  

Oleh:

Miharjo, Setiyono

Jenis: Article from Journal - ilmiah internasional - terdaftar di DIKTI
Dalam koleksi: The Indonesian Journal of Accounting Research (Jurnal Riset Akuntansi Indonesia) vol. 13 no. 1 (Jan. 2010), page 1-14.
Topik: Value Relevance; Earings and Book Value; CEO Stock Options; Director Stock Options

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: RR17.8 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Stock options have become an increasingly important component of executive compansation. One of the primary reason firms grant stock options to their executives is to motivate them to increase the firm value. If the stock price increases, executives will be rewanded through the increase in the value of their options. Theoretically, the higher the stock price, the higher the value of those options and the wealthiest the executives will become. Granting stock options to directors, however, may raise a question about its effectiveness since monitoring management is the primary reason of their appointment. Nonetheless, if the directors are also agent, whose interest are not necessarily aligned with those of the shareholders, the same arguments will apply to them. Consistent with these argument, this study empirically shows that the value of CEO stock options and the value of director stock options are positively associated with the firm value. These results suggest that besides earings and book value of equity, the have value-relevance in explaning the firm value.

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