Journal article
Does backdating explain the stock price pattern around executive stock option grants?
Journal of financial economics, Vol.83(2), pp.271-295
02/01/2007
DOI: 10.1016/j.jfineco.2005.12.003
Abstract
Extant studies show that stock returns are abnormally negative before executive option grants and abnormally positive afterward. We find that this return pattern is much weaker since August 29, 2002, when the Securities and Exchange Commission requirement that option grants must be reported within two business days took effect. Furthermore, in those cases in which grants are reported within one day of the grant date, the pattern has completely vanished, but it continues to exist for grants reported with longer lags, and its magnitude tends to increase with the reporting delay. We interpret these findings as evidence that most of the abnormal return pattern around option grants is attributable to backdating of option grant dates.
Details
- Title: Subtitle
- Does backdating explain the stock price pattern around executive stock option grants?
- Creators
- Randall A. Heron - Indiana University – Purdue University IndianapolisErik Lie - University of Iowa
- Resource Type
- Journal article
- Publication Details
- Journal of financial economics, Vol.83(2), pp.271-295
- Publisher
- Elsevier B.V
- DOI
- 10.1016/j.jfineco.2005.12.003
- ISSN
- 0304-405X
- eISSN
- 1879-2774
- Language
- English
- Date published
- 02/01/2007
- Academic Unit
- Finance
- Record Identifier
- 9984380528702771
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