We provide an analytical and flexible framework to evaluate executive stock options. Our model takes into account the vesting period, American style, resetting and reloading provisions that are features of many options programs, and also considers the trading and hedging restrictions on executives. We identify a recursive structure in the stream of options that are granted to the executive over...

Recent studies show that regression-based tests of the asymmetric timeliness of earnings may be invalid. We develop an econometric model showing that these tests correctly identify whether or not earnings are conservative; however, the inclusion of future rents in equity values causes the regression coefficients to mismeasure the degree of conservatism. This mismeasurement biases cross-sectiona...

ABSTRACT Securities litigation is relatively rare, but can significantly affect sued firms. We extend this research by examining the spillover effect of securities on industry peers using a sample disclosure-related litigation—distinct from events such as restatements and SEC enforcement. find investors respond immediately exhibit negative abnormal returns before after case filings. Additionall...

Supported molybdenum carbide (yMo2C/M41) and Cu-promoted molybdenum carbide, using a mechanical mixing and co-impregnation method (xCuyMo2C/M41-M and xCuyMo2C/M41-I) on a mesoporous molecular sieve MCM-41, were prepared by temperature-programmed carburization method in a CO/H2 atmosphere at 1073 K, and their catalytic performances were tested for CO2 hydrogenation to form methanol. Both catalys...

Performance-based pay is an important instrument to align the interests of managers with the interests of shareholders. However, recent evidence suggests that high-powered incentives also provide managers with incentives to manipulate the firm's reported earnings. The previous literature has focused primarily on Chief Executive Officers, but managers further down in the firm hierarchy—division ...

This paper examines capital market effects of changes in securities regulation. We focus on two key capital market directives in the European Union (EU) that tighten market abuse and transparency regulation and enforcement. All EU member states are required to adopt these two directives but their exact implementation into national law and the design of enforcement regimes differ across member s...

This paper examines capital market effects of changes in securities regulation. We analyze two key directives in the European Union (EU) that tightened market abuse and transparency regulation and its enforcement. All EU member states were required to adopt these two directives but did so at different points in time. Our research design exploits this differential timing of the same regulatory c...

Motivated by recent recommendations by both European and American accounting standards boards that executive stock options be expensed in firms’ statements, we provide an analytical and flexible framework for their evaluation. Our approach takes into account the vesting period, American style, resetting and reloading provisions that are features of many options programs, and also considers the ...

In recent years, a large number of countries have made reporting under International Financial Reporting Standards (IFRS) mandatory. The capital-market effects of this change have been extensively studied, but their sources are not yet well understood and still heavily debated. This paper presents new evidence that aims to distinguish between several potential explanations for these capital-mar...