The effect of option granting on executive stock purchases

We provide a simple asymmetric information model showing that, in contrast to portfolio diversification arguments, there is a natural complementarity between executive options and stock ownership. Moreover, managers can be made worse off by being granted more executive options.

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Year of publication:	2012
Authors:	Grout, Paul A. ; Zalewska, Anna
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 114.2012, 1, p. 12-15
Publisher:	Elsevier
Subject:	CEO compensation \| Managerial incentives \| Asymmetric information \| Corporate governance

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Type of publication:	Article
Classification:	G30 - Corporate Finance and Governance. General ; G32 - Financing Policy; Capital and Ownership Structure ; J33 - Compensation Packages; Payment Methods
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010597180