The effect of option granting on executive stock purchases

Paul Grout and Anna Zalewska

Economics Letters, 2012, vol. 114, issue 1, 12-15

Abstract: We provide a simple asymmetric information model showing that, in contrast to portfolio diversification arguments, there is a natural complementarity between executive options and stock ownership. Moreover, managers can be made worse off by being granted more executive options.

Keywords: CEO compensation; Managerial incentives; Asymmetric information; Corporate governance (search for similar items in EconPapers)
JEL-codes: G30 G32 J33 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:114:y:2012:i:1:p:12-15

DOI: 10.1016/j.econlet.2011.08.017

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