Abstract

http://ssrn.com/abstract=2355084
 
 

References (39)



 
 

Footnotes (39)



 


 



Out-of-the-Money CEOs: Private Control Premium and Option Exercises


Vyacheslav Fos


Boston College - Department of Finance

Wei Jiang


Columbia Business School - Finance and Economics

February 2015

Columbia Business School Research Paper No. 13-82

Abstract:     
When a proxy contest is looming, the rate at which CEOs exercise options in order to sell (hold) the resulting shares slows down by 80% (accelerates by 60%), consistent with their desire to maintain or strengthen voting rights when facing challenges. Such deviations are closely aligned with features unique to proxy contests, such as the record dates and nomination status; and are more pronounced when the private benefits are higher or when the voting rights are more crucial. The distortions suggest that incumbents value their stocks higher than the market price when the voting rights are valuable for defending control.

Number of Pages in PDF File: 68

Keywords: private benefits of control; proxy contests; insider trading; early option exercise

JEL Classification: G32, G34, G38, J33


Open PDF in Browser Download This Paper

Date posted: November 17, 2013 ; Last revised: March 16, 2015

Suggested Citation

Fos, Vyacheslav and Jiang, Wei, Out-of-the-Money CEOs: Private Control Premium and Option Exercises (February 2015). Columbia Business School Research Paper No. 13-82. Available at SSRN: http://ssrn.com/abstract=2355084 or http://dx.doi.org/10.2139/ssrn.2355084

Contact Information

Vyacheslav Fos (Contact Author)
Boston College - Department of Finance ( email )
Carroll School of Management
140 Commonwealth Avenue
Chestnut Hill, MA 02467-3808
United States
Wei Jiang
Columbia Business School - Finance and Economics ( email )
3022 Broadway
New York, NY 10027
United States
(212) 854-5553 (Phone)

Feedback to SSRN


Paper statistics
Abstract Views: 916
Downloads: 171
Download Rank: 113,973
References:  39
Footnotes:  39

© 2015 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.406 seconds