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Please use this identifier to cite or link to this item: http://hdl.handle.net/2451/27146

Title: Good Timing: CEO Stock Option Awards and Company News Announcements
Authors: Yermack, David
Issue Date: Oct-1995
Series/Report no.: FIN-95-035
Abstract: This paper proposes and implements a new method for investigating whether CEOs influence the terms of their own compensation. I analyze the dates of 619 stock option awards to CEOs of Fortune 500 companies between 1992 and 1994, finding that the timing of awards coincides with favorable movements in company stock prices. Patterns of companies’ quarterly earnings announcements are consistent with an interpretation that CEOs receive stock option awards shortly before favorable corporate news. I evaluate and reject several alternative explanations of the results, including insider trading and the manipulation of news announcement dates.
URI: http://hdl.handle.net/2451/27146
Appears in Collections:Finance Working Papers

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