Taking Stock : Equity - Based Compensation And The Evolution of Managerial Ownership  

Oleh:

Ofek, Elie ; Yermack, David

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 55 no. 3 (2000), page 1367-1384.
Topik: equity; studies; ownership; managers; stock options; statistical analysis
Fulltext: p 1367.pdf (94.12KB)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88.2 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

We investigate the impact of stock based compensation on managerial ownership. We find that equity compensation suceeds in increasing incentives of lower -ownership managers, but higher - ownership managers negate much of its impact by selling previously owned shares. When executives exercise options to acquire stock, nearly all of the shares are sold. Our results illuminate dynamic aspects of managerial ownership arising from divergent goals of boards of directors, who use equity compensation for incentives, and managers, who respond by selling shares for diversification. The findings cast doubt on the frequent and important theoretical assumption that managers cannot hedge the risks of these awards.

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