Do CEO stock options prevent or promote fraudulent financial reporting?

• 成果类型: Article
• 署名作者: O'Connor, Joseph P., Jr.; Priem, Richard L.; Coombs, Joseph E.; Gilley, K. Matthew
• 署名单位: University of Texas System; University of Texas El Paso; University of Wisconsin System; University of Wisconsin Milwaukee; Texas A&M University System; Texas A&M University College Station; Oklahoma State University System; Oklahoma State University - Stillwater
• 刊物名称: ACADEMY OF MANAGEMENT JOURNAL
• ISSN/ISSBN: 0001-4273
• 发表日期: 2006
• 页码: 483-500
• 关键词: board composition; earnings management; Agency theory; firm; performance; managerial; OWNERSHIP; COMPENSATION; DIRECTORS; COSTS

摘要

We contrast the conventional view that CEO stock options aid corporate governance by reducing moral hazard with the proposal that CEO stock options may subvert sound corporate governance. Views were tested in 65 matched pairs of public U.S. firms that either had or had not been discovered misreporting financial results. Our results support both the traditional perspective and our unprincipled agent view: in our sample, large CEO stock option grants were sometimes associated with a lower incidence of fraudulent reporting and sometimes with a greater incidence, depending upon whether CEO duality was present and whether directors also held stock options.