We estimate the relation between top 5 executive stock option (ESO) grants and future earnings to examine whether incentive alignment or rent extraction by top managers explains option granting behavior. The future operating income associated with a dollar of Black-Scholes value of an ESO grant...

Recent evidence and statements in Harris and Kemsley (1999) suggests that shareholder-level dividend taxes on retained earnings are fully impounded at the top statutory rate into stock prices. We re-examine these claims and results. Using the traditional definition of dividend tax...

Although agency theory suggests that firms ought to index executive compensation to remove market-wide effects (i.e., RPE), there is little evidence to support this theory. Oyer (2004) posits that absence of RPE is optimal if the CEO's reservation wages from outside employment opportunities rise...

We estimate the relation between stock option (ESO) grants to the top five executives and future earnings to examine whether incentive alignment or rent extraction by top managers explains option granting behavior. The future operating income associated with a dollar of Black-Scholes value of an...

Harris and Kemsley (1999) suggest that shareholder-level dividend taxes on retained earnings are fully impounded into stock prices at the top statutory rate. Harris and Kemsley base their empirical tests on Ohlson (1995) with the addition of dividend taxes. We analyze Harris and Kemsley's...

This paper examines the decision to exercise employee stock options (ESOs). Our results indicate a positive relation between the extent of quot;earlyquot; exercise and the unhedged risk of the option. Specifically we document a positive relation between the variance of ESO returns and the extent...

We examine whether executive stock options (ESO) encourage managers to make risky investments on behalf of shareholders. For a sample of oil and gas producers, we find, as predicted, that the variance of cash flows from exploration activity and the extent of price risk exposure hedged are...

This paper examines the decision to exercise employee stock options (ESOs). Our results indicate a positive relation between the extent of quot;earlyquot; exercise and the unhedged risk of the option. Specifically we document a positive relation between the variance of ESO returns and the extent...

We examine whether executive stock options (ESOs) provide managers with incentives to invest in risky projects. For a sample of oil and gas producers, we examine whether the coefficient of variation of future cash flows from exploration activity (our proxy for exploration risk) increases with...

We analyze survey responses from nearly 600 tax executives to better understand corporate decisions about real investment location and profit repatriation. Our evidence indicates that avoiding financial accounting income tax expense is as important as avoiding cash taxes when corporations decide...