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http://ssrn.com/abstract=516004
 
 

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Firms' Voluntary Recognition of Stock-Based Compensation Expense


Ron Kasznik


Stanford Graduate School of Business

Mary E. Barth


Stanford University - Graduate School of Business

David Aboody


University of California, Los Angeles (UCLA) - Accounting Area

December 2003

Stanford University GSB Research Paper No. 1795(R)

Abstract:     
This study investigates factors associated with firms' decisions in 2002 and early 2003 to recognize stock-based compensation expense under Statement of Financial Accounting Standards (SFAS) No. 123. We find that the likelihood of SFAS 123 expense recognition is significantly related to the extent the firm is active in capital markets, private incentives of top management and members of the board of directors, the extent of information asymmetry, and political costs. Although recognizing firms have significantly smaller SFAS 123 expense, we find no significant incremental relation between recognition likelihood and SFAS 123 expense magnitude after controlling for other factors we expect explain the recognition decision. We also find significant positive announcement returns for earlier announcing firms, particularly those stating that increased earnings transparency motivates their decision.

Number of Pages in PDF File: 50

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Date posted: March 14, 2004  

Suggested Citation

Kasznik, Ron and Barth, Mary E. and Aboody, David, Firms' Voluntary Recognition of Stock-Based Compensation Expense (December 2003). Stanford University GSB Research Paper No. 1795(R). Available at SSRN: http://ssrn.com/abstract=516004 or http://dx.doi.org/10.2139/ssrn.516004

Contact Information

Ron Kasznik
Stanford Graduate School of Business ( email )
518 Memorial Way
Stanford, CA 94305-5015
United States
650-725-9740 (Phone)
650-725-6152 (Fax)

Mary E. Barth (Contact Author)
Stanford University - Graduate School of Business ( email )
655 Knight Way
Stanford, CA 94305-5015
United States
650-723-9040 (Phone)
650-725-0468 (Fax)

David Aboody
University of California, Los Angeles (UCLA) - Accounting Area ( email )
D410 Anderson Complex
Los Angeles, CA 90095-1481
United States
310-825-3393 (Phone)
310-267-2193 (Fax)
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