Abstract

http://ssrn.com/abstract=1741364
 
 

References (48)



 


 



Option Backdating: Market Overreaction and Management Motives


Jennifer Li


Brock University

Fayez A. Elayan


Brock University - Department of Accounting, Faculty of Business

Thomas O. Meyer


Southeastern Louisiana University - Department of Marketing and Finance

Parunchana Pacharn


Brock University

January 15, 2011

CAAA Annual Conference 2011

Abstract:     
Prior studies on option backdating have focused exclusively on the initial backdating investigation announcements. We extend the analyses to consider the outcomes of the investigation as well. By examining the market responses both to the initial investigation announcement and to the investigation outcome, we provide an evidence that the market may have overreacted to the initial investigation announcement. Our results also show that the media bias in covering more bad than good news may have contributed to the overreaction. Finally, we re-examine the issue of management motives, focusing on firms which were found to be guilty of intentional backdating. No prior study has addressed the motive issues with the sample of “true” backdators before.

Number of Pages in PDF File: 46

Keywords: Backdating, Employee Stock Options, Overreaction

JEL Classification: M41

working papers series


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Date posted: January 16, 2011  

Suggested Citation

Li, Jennifer and Elayan, Fayez A. and Meyer, Thomas O. and Pacharn, Parunchana, Option Backdating: Market Overreaction and Management Motives (January 15, 2011). CAAA Annual Conference 2011. Available at SSRN: http://ssrn.com/abstract=1741364 or http://dx.doi.org/10.2139/ssrn.1741364

Contact Information

Jennifer Li
Brock University ( email )
500 Glenridge Avenue
St. Catherines, Ontario L2S 3A1
Canada
Fayez A. Elayan
Brock University - Department of Accounting, Faculty of Business ( email )
St. Catharines, Ontario L2S 3A1
Canada
905-688-5550 (Phone)
HOME PAGE: http://www.brocku.ca
Thomas Otto Meyer
Southeastern Louisiana University - Department of Marketing and Finance ( email )
SLU 10844
Hammond, LA 70402
United States
985-549-3103 (Phone)
985-549-5010 (Fax)
Parunchana Pacharn (Contact Author)
Brock University ( email )
500 Glenridge Avenue
St. Catherines, Ontario L2S 3A1
Canada
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