Does CEOs Stock Options Affect Firms' Performance
Using the agency, resource-based view, stakeholder, and stewardship theories, we investigate the relationship between chief executive officers' (CEOs') stock options, long-term debt, cash/sales turnover, and firm performance. Our empirical analysis suggests that these theories contribute to explaining how CEO stock options affect firms' performance. We collected data from WRDS's ExecuComp and Computstat databases to test our hypotheses with a sample of 158539 companies from 2000 to 2021. Results showed a statistically significant positive but weak association between CEOs' stock options proxied stockholders' equity and acquisition and mergers (M &A). At the same time, long-term debt was negatively associated with firm performance. Results also indicated that the interactions between long-term debt and sales/cash turnover were statistically insignificant. We also found a statistically significant positive but weak association between long-term debt and property, plant, and equipment, long-term debt. Additionally, long-term equally has a positive but non-significant impact on returns on assets (ROA). However, the interaction between stockholders' equity and cash/sales turnover was significant, indicating that cash turnover moderates the relationship between firms' performance-proxied ROA and stockholders' equity, despite the direction of the coefficient of the interaction being negative rather than positive. These findings have implications for policy and practice and advance our knowledge of how CEOs' options respond to firms' performance
Year of publication: |
2023
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Authors: | Jallow, Assan |
Publisher: |
[S.l.] : SSRN |
Subject: | Aktienoption | Stock option | Führungskräfte | Managers | Unternehmenserfolg | Firm performance |
Saved in:
freely available
Extent: | 1 Online-Ressource (36 p) |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments February 23, 2023 erstellt |
Other identifiers: | 10.2139/ssrn.4367700 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10014256943
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