CEO Stock Option Awards and Corporate Voluntary Disclosures

Aboody, David; Kasznik, Ron

doi:10.2139/ssrn.144589

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CEO Stock Option Awards and Corporate Voluntary Disclosures

42 Pages Posted: 4 Jan 1999

See all articles by David Aboody

David Aboody

University of California, Los Angeles (UCLA) - Accounting Area

Ron Kasznik

Stanford Graduate School of Business

Date Written: May 22, 2000

Abstract

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

Aboody, David and Kasznik, Ron, CEO Stock Option Awards and Corporate Voluntary Disclosures (May 22, 2000). Available at SSRN: https://ssrn.com/abstract=144589 or http://dx.doi.org/10.2139/ssrn.144589