We examine executive stock option exercise activity around a sample of acquisition announcements between 1996 and 2006, particularly focusing on a subset of exercises that we identify as potentially informed. For stock-financed acquisitions, we find a surge in informed exercises by acquirers'...

We find evidence that executives use private information in exercising stock options. The most informed executives exercise early, exercise after the vest date rather than at the vest date, do not exercise in anticipation of dividends, exercise a high percentage of their options, sell a large...