Stocking up: Executive optimism, option exercise, and share retention

• 成果类型: Article
• 署名作者: Sen, Rik; Tumarkin, Robert
• 署名单位: Hong Kong University of Science & Technology
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2015.08.001
• 发表日期: 2015
• 页码: 399-430
• 关键词: optimism; Executive stock option; Exercise policy; Optimism measures; Corporate financial policies

摘要

We show that an executive is optimistic about her company's prospects if and only if she retains some of the shares received whenever she exercises company stock options. Empirically, an indicator of optimism based on this idea matches the expected relations between optimism and corporate decision-making better than commonly used indicators based on the timing of option exercise. This makes sense, as our model of an executive's optimal option exercise and portfolio choice demonstrates that the timing of option exercise depends just as much on stock and other executive characteristics as it does on optimism. (C) 2015 Elsevier B.V. All rights reserved.