Performance-vesting provisions in executive compensation

• 成果类型: Article
• 署名作者: Bettis, J. Carr; Bizjak, John; Coles, Jeffrey L.; Kalpathy, Swaminathan
• 署名单位: Arizona State University; Arizona State University-Tempe; Texas Christian University; Utah System of Higher Education; University of Utah; Texas Christian University
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2018.05.001
• 发表日期: 2018
• 关键词: STOCK-OPTIONS; corporate performance; MANAGERIAL OWNERSHIP; earnings management; risk-taking; incentives; valuation; BEHAVIOR; determinants; grants

摘要

The usage of performance-vesting (p-v) equity awards to top executives in large U.S. companies has grown from 20 to 70 percent from 1998 to 2012. We measure the effects of p-v provisions on value, delta, and vega of equity-based compensation. We find large differences in the value of p-v awards reported in company disclosures versus economic value. We also find that equity-based grants continue to convey significant compensation convexity (vega) after ASC 718 (2005) and that, counter to recent claims in the literature, our analysis empirically reaffirms the presence of a causal relation between compensation convexity (vega) and firm risk.