CEO Stock Option Awards and Corporate Voluntary Disclosures
42 Pages Posted: 4 Jan 1999
Date Written: May 22, 2000
We investigate whether CEOs manage the timing of their voluntary disclosures around stock option awards. We conjecture that CEOs manage investors' expectations around award dates by delaying good news and rushing forward bad news. For a sample of 2,039 CEO option awards by 572 firms with fixed award schedules, we document changes in share prices and analyst earnings forecasts around option awards that are consistent with our conjecture. We also provide more direct evidence based on management earnings forecasts issued prior to award dates. Our findings suggest that CEOs make opportunistic voluntary disclosure decisions that maximize their stock option compensation.
JEL Classification: M41, M43, J33
Suggested Citation: Suggested Citation