Journal article
What Fraction of Stock Option Grants to Top Executives Have Been Backdated or Manipulated?
Management science, Vol.55(4), pp.513-525
04/01/2009
DOI: 10.1287/mnsc.1080.0958
Abstract
We estimate that 13.6% of all option grants to top executives during the period 1996-2005 were backdated or otherwise manipulated. Our study primarily focuses on grants that were unscheduled and at-the-money, of which we estimate that 18.9% were manipulated. The fraction is 23.0% before the new two-day. ling requirement took effect on August 29, 2002, and 10.0% afterward. For the minority of grants that are not filed within the required two-day window, the fraction of manipulated grants remains as high as 19.9%. We further find a higher frequency of manipulation among tech firms, small firms, and firms with high stock price volatility. In addition, firms that use smaller (non-big-five) auditing firms are more likely to. le their grants late. Finally, at the firm level, we estimate that 29.2% of firms manipulated grants to top executives at some point between 1996 and 2005.
Details
- Title: Subtitle
- What Fraction of Stock Option Grants to Top Executives Have Been Backdated or Manipulated?
- Creators
- Randall A. Heron - Indiana University – Purdue University IndianapolisErik Lie - University of Iowa
- Resource Type
- Journal article
- Publication Details
- Management science, Vol.55(4), pp.513-525
- Publisher
- Informs
- DOI
- 10.1287/mnsc.1080.0958
- ISSN
- 0025-1909
- eISSN
- 1526-5501
- Number of pages
- 13
- Language
- English
- Date published
- 04/01/2009
- Academic Unit
- Finance
- Record Identifier
- 9984380489202771
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