Changes in CEO Stock Option Grants: A Look at the Numbers
Daniel Ferreira and
No 12318, CEPR Discussion Papers from C.E.P.R. Discussion Papers
We study changes in CEO stock option grants. Unlike most of the literature, we focus on the number rather than the value of options granted. We first provide a detailed description of the main aggregate trends in CEO stock option grants. We then consider the cross-sectional heterogeneity in option-granting activity. We find that CEOs who either overinvest or underinvest subsequently receive fewer stock options as part of their compensation packages. CEOs who hold exercisable deeply-in-the-money options (overconfident CEOs) also receive fewer stock options in subsequent periods. Our findings provide insights into the dynamics of CEO compensation contracts.
Keywords: CEO overconfidence; corporate investment; stock option grants (search for similar items in EconPapers)
JEL-codes: G30 G32 J33 M41 M52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn and nep-hrm
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