CEO stock option awards and the timing of
corporate voluntary disclosures
David Aboody , Ron Kasznik (2000)
, Main Questions of the Article
The article investigates how CEOs can manipulate the timing of
voluntary corporate disclosures connected with stock option awards.
The central idea is that CEOs influence on investors' expectations by
delaying the disclosure of good news and accelerating the disclosure of
bad news right before their stock option awards.
Reduction of the stock price right before the grant of options allows
CEOs to receive options at a lower strike price, increasing their potential
financial gains when the stock price recovers.
corporate voluntary disclosures
David Aboody , Ron Kasznik (2000)
, Main Questions of the Article
The article investigates how CEOs can manipulate the timing of
voluntary corporate disclosures connected with stock option awards.
The central idea is that CEOs influence on investors' expectations by
delaying the disclosure of good news and accelerating the disclosure of
bad news right before their stock option awards.
Reduction of the stock price right before the grant of options allows
CEOs to receive options at a lower strike price, increasing their potential
financial gains when the stock price recovers.
