How Do Executives Exercise Their Stock Options?*
نویسندگان
چکیده
منابع مشابه
How do Executives Exercise Stock Options?∗
We analyze a large data set of stock option exercises for a large data set of almost 200,000 option packages for more than 16,000 US top executives and analyze their motivations for the early exercise of their stock options. We estimate a hazard model to identify the main variables that in uence executives' timing decisions and nd that behavioral factors (e.g., trends in past stock prices), ins...
متن کاملExecutive Exercise Explained: Patterns for Stock Options
It is well documented that executives granted stock options tend to exercise early and in a few large transactions or “blocks”. Standard risk-neutral valuation models cannot explain these patterns, and attempts to capture the exercise behavior of risk averse executives have been limited to the special case of one option. This paper solves for the optimal exercise behavior for a risk averse exec...
متن کاملOptimal exercise of executive stock options
In the absence of frictions if a portfolio strategy replicates the payoff of one unit of a claim, an appropriately scaled strategy replicates any amount of the claim. If assets are priced by arbitrage, the value per-unit is invariant to the amount of the asset considered. In particular, in the case of American claims, the optimal exercise time is independent of the amount of the claim that is c...
متن کاملDo Stock Options Overcome Managerial Risk Aversion? Evidence from Exercises of Executive Stock Options
We report that the probability that executives exercise options early decreases with the volatility of the underlying stock return. We interpret this to mean that executives’ subjective option value increases with volatility and that option grants increase executives’ risk appetite. Further decomposition reveals that the results are most pronounced for idiosyncratic volatility, consistent with ...
متن کاملThe Valuation of Executive Stock Options when Executives Can Influence the Payoffs
It is widely believed that executives value stock options at less than market or Black-ScholesMerton values. This belief is contingent, however, on a subtle assumption that executives are, like shareholders, price takers with no ability to influence the underlying stock. But executives clearly have the ability to influence the stock, as that is the principal reason why they are granted the opti...
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ژورنال
عنوان ژورنال: The Review of Corporate Finance Studies
سال: 2020
ISSN: 2046-9128,2046-9136
DOI: 10.1093/rcfs/cfaa003