Value Relevance of the Stock Options Disclosure or Reporting
32 Pages Posted: 14 Jan 2009
Date Written: January 13, 2009
Abstract
This study investigates the relation between share price, stock-based compensation expense and information about employee stock options (ESO) disclosed in financial statement footnotes. Our results, for a sample of 750 observations over the period 2000-2005, suggest that the market values both the stock-based compensation expense recognized in financial statement and information about ESO disclosed in footnotes, but that ESO recognition in income statement or the pro forma disclosure showing the impact of expensing ESO on net income, are not as value relevant as the information disclosed in footnotes.
Note: Downloadable Document is in French.
Keywords: Stock options, value-relevance of the information, financial markets, accounting standard
JEL Classification: M41
Suggested Citation: Suggested Citation
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