 CHANGES IN EQUITY COMPENSATION PLANS: EVIDENCE FROM THE U.S. CAPITAL MARKETSRogelio J. Cardona Global Journal of Business Research, 2011, vol. 5, issue 2, 41-52 Abstract: The Financial Accounting Standards Board and the United States Congress enacted new legislation and regulations in 2002 requiring corporations to recognize stock option grants as an expense (voluntarily) on their financial statements. In 2004 option, expensing became mandatory. This paper describes the different changes made by a sample of U.S. public corporations to their Equity compensation plans after the mandatory expensing of stock options went into effect. The results suggest that firms seem to have reacted to the required option expensing by accelerating the vesting of their outstanding options with a contemporaneous reduction in the use of stock options as a compensation incentive. Executive (employee) compensation practices seem to have shifted from stock option grants to performance and restricted stock awards. An unexpected finding of this investigation was observing that besides employees and Board directors, non-IT firms are also granting equity compensation to non-employees such as vendors and consultants. Keywords: Equity compensation plans; stock options; performance stock; restricted stock (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ibf:gjbres:v:5:y:2011:i:2:p:41-52 Access Statistics for this article Global Journal of Business Research is currently edited by Terrance Jalbert More articles in Global Journal of Business Research from The Institute for Business and Finance Research |
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