Changes in CEO stock option grants: a look at the numbers

Vasiliki Athanasakou, Daniel Ferreira and Lisa Goh

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We study changes in the number of CEO stock option grants. Despite some evidence of short-term rigidity, the number of options granted changes frequently over time. CEOs of firms with unusual investment patterns 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 results show that past CEO behavior predicts stock option grants. These insights can inform theoretical discussion on option-granting behavior and, more broadly, on the board's re-contracting process.

Keywords: CEO overconfidence; corporate investment; stock option grants; stock option rigidity (search for similar items in EconPapers)
JEL-codes: G30 G32 J33 M41 M52 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2022-08-01
New Economics Papers: this item is included in nep-cfn
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Published in Journal of Corporate Finance, 1, August, 2022, 75. ISSN: 0929-1199

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:115609

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