Strategic news releases in equity vesting months

Alex Edmans, Luis Goncalves-Pinto, Moqi Groen-Xu and Yanbo Wang

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

Abstract: We find that CEOs release 20% more discretionary news items in months in which they are expected to sell equity, predicted using scheduled vesting months. These vesting months are determined by equity grants made several years prior, and thus unlikely driven by the current information environment. The increase arises for positive news, but not neutral or negative news, nor non-discretionary news. News releases fall in the month before and month after the vesting month. News in vesting months generates a temporary increase in stock prices and market liquidity, which the CEO exploits by cashing out shortly afterwards.

Keywords: Voluntary Disclosure; Equity Vesting; CEO Incentives; News (search for similar items in EconPapers)
JEL-codes: G14 G34 (search for similar items in EconPapers)
Date: 2018-11-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Published in Review of Financial Studies, 1, November, 2018, 31(11), pp. 4099 - 4141. ISSN: 0893-9454

Downloads: (external link)
http://eprints.lse.ac.uk/88301/ Open access version. (application/pdf)

Related works:
Journal Article: Strategic News Releases in Equity Vesting Months (2018)
Working Paper: Strategic News Releases in Equity Vesting Months (2014)
Working Paper: Strategic News Releases in Equity Vesting Months (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:88301

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager (lseresearchonline@lse.ac.uk).