Out-of-the-Money CEOs: Private Control Premium and Option Exercises

• 成果类型: Article
• 署名作者: Fos, Vyacheslav; Jiang, Wei
• 署名单位: Boston College; Columbia University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhv068
• 发表日期: 2016
• 页码: 1549
• 关键词: CORPORATE GOVERNANCE; voting-rights; STOCK-OPTIONS; market value; INFORMATION; benefits; overconfidence; valuation; MODEL

摘要

When a proxy contest is looming, the rate at which CEOs exercise options to sell (hold) the resulting shares slows down by 80% (accelerates by 60%), consistent with their desire to maintain or strengthen voting rights when facing challenges. Such deviations are closely aligned with features unique to proxy contests, such as the record dates and nomination status, and are more pronounced when the private benefits are higher or when the voting rights are more crucial. The distortions suggest that incumbents value their stocks higher than the market price when voting rights are valuable for defending control.