Abstract

http://ssrn.com/abstract=1295261
 
 

Citations (4)



 
 

Footnotes (8)



 


 



On Rescissions in Executive Stock Options


Menachem Brenner


New York University (NYU) - Department of Finance

Rangarajan K. Sundaram


New York University (NYU) - Department of Finance

David Yermack


New York University (NYU) - Stern School of Business

April 2002

NYU Working Paper No. S-CG-02-05

Abstract:     
We study executive stock options that permit the option holder to rescind an exercise decision, returning the shares acquired to the company and obtaining a refund of the exercise price. Rescissions occurred at a number of U.S. companies in 2000 after the large decline in internet stocks, and have been widely condemned as a weakening of incentives. To the contrary, we find that in many situations rescindable options dominate ordinary options by delivering greater value and stronger incentives to the employee at a lower cost to the firm. The attractiveness of rescindable options arises as a consequence of the income tax treatment of most executive stock options in the U.S.

Number of Pages in PDF File: 32

working papers series


Download This Paper

Date posted: November 4, 2008  

Suggested Citation

Brenner, Menachem and Sundaram, Rangarajan K. and Yermack, David, On Rescissions in Executive Stock Options (April 2002). NYU Working Paper No. S-CG-02-05. Available at SSRN: http://ssrn.com/abstract=1295261

Contact Information

Menachem Brenner (Contact Author)
New York University (NYU) - Department of Finance ( email )
Stern School of Business
44 West 4th Street
New York, NY 10012-1126
United States
212-998-0323 (Phone)
212-995-4233 (Fax)
Rangarajan K. Sundaram
New York University (NYU) - Department of Finance ( email )
Stern School of Business
44 West 4th Street
New York, NY 10012-1126
United States
212-998-0308 (Phone)
212-995-4233 (Fax)
David Yermack
New York University (NYU) - Stern School of Business ( email )
44 West 4th Street
Suite 9-160
New York, NY 10012-1126
United States
212-998-0357 (Phone)
212-995-4220 (Fax)
HOME PAGE: http://www.stern.nyu.edu/~dyermack
Feedback to SSRN


Paper statistics
Abstract Views: 323
Downloads: 25
Citations:  4
Footnotes:  8

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.235 seconds