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dc.contributor.authorYermack, David-
dc.description.abstractThis paper analyzes companies' disclosure of CEO stock option values in compliance with recent changes in the SEC’s regulations for reporting executive compensation data to stockholders. Results suggest that companies exploit the flexibility of the SEC’s disclosure regulations to reduce the apparent value of managers’ compensation. Companies shorten the expected lives of stock options and independently apply discounts to the Black-Scholes formula. Theoretical support for these adjustments is often lacking, and companies universally ignore reasons that the Black-Scholes formula might underestimate the value of executive stock options, but also provide a means of forecasting compliance with controversial FASB proposals to require disclosure of the implicit compensation expense represented by executive stock option awards.en
dc.titleCompanies' Modest Claims About the Value of CEO Stock Option Awardsen
dc.typeWorking Paperen
Appears in Collections:Finance Working Papers

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