The Role of Executive Stock Options in REIT Repurchases

18 Pages Posted: 14 Jan 2008 Last revised: 30 Dec 2008

See all articles by Chinmoy Ghosh

Chinmoy Ghosh

University of Connecticut - Department of Finance

John P. Harding

University of Connecticut - School of Business - Center for Real Estate and Urban Economic Studies

Özcan Sezer

University of Toledo

C. F. Sirmans

Florida State University - Department of Risk Management, Insurance, Real Estate & Business Law

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Abstract

This paper examines the relationship between managerial stock option holdings and the decision to announce a repurchase of the firm's common stock. Managerial stock option holdings should reinforce the traditional undervaluation, free cash flow, and capital structure motives for repurchases by helping to align the objectives of management and shareholders. Data from the REIT industry during the peak period of repurchase activity (1997-1999) are used to estimate a logit model of the decision to announce a repurchase program. After controlling for the standard motivations discussed in the literature, the findings reveal that managerial option holdings are positively related to the likelihood of a repurchase announcement.

Keywords: stock option, repurchase, company stock, repurchases

Suggested Citation

Ghosh, Chinmoy and Harding, John P. and Sezer, Özcan and Sirmans, C. F., The Role of Executive Stock Options in REIT Repurchases. Journal of Real Estate Research, Vol. 30, No. 1, 2008, Available at SSRN: https://ssrn.com/abstract=1081605

Chinmoy Ghosh (Contact Author)

University of Connecticut - Department of Finance ( email )

School of Business
2100 Hillside Road
Storrs, CT 06269
United States
860-486-3040 (Phone)
860-486-0349 (Fax)

John P. Harding

University of Connecticut - School of Business - Center for Real Estate and Urban Economic Studies ( email )

2100 Hillside Road
Unit 1041RE
Storrs, CT 06269-2041
United States
860-486-3227 (Phone)
860-486-0349 (Fax)

Özcan Sezer

University of Toledo ( email )

Mail Stop 119, HH 3000
Toledo, OH 43606

C. F. Sirmans

Florida State University - Department of Risk Management, Insurance, Real Estate & Business Law ( email )

Tallahasse, FL 32306
United States
850 644-4076 (Phone)

HOME PAGE: http://www.cob.fsu.edu/rmi

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