The Role of Politics in Repricing Executive Options

Pollock, Tim; Fischer, Harald M.; Wade, James B.

doi:10.2139/ssrn.301222

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The Role of Politics in Repricing Executive Options

27 Pages Posted: 6 Mar 2002

See all articles by Tim Pollock

Harald M. Fischer

University of Connecticut - School of Business

James B. Wade

University of Wisconsin - Madison - Department of Management and Human Resources

There are 2 versions of this paper

Date Written: June 15, 2001

Abstract

We explore how CEO power impacts executive option repricing. The spread between the option strike price and the market value of the stock impacts the likelihood of repricing. This effect is enhanced when the CEO is the Chairman of the Board. Firm and CEO visibility, having more board members appointed after the CEO, having a classified board, and higher percentages of CEO and institutional ownership reduce the impact of spread on the likelihood of repricing.

Keywords: stock options, power, corporate governance

JEL Classification: G3, M1

Suggested Citation: Suggested Citation

Pollock, Tim and Fischer, Harald M. and Wade, James B., The Role of Politics in Repricing Executive Options (June 15, 2001). Available at SSRN: https://ssrn.com/abstract=301222 or http://dx.doi.org/10.2139/ssrn.301222