NBER Working Paper No. w20476
51 Pages Posted: 30 Aug 2014 Last revised: 16 Sep 2017
Date Written: January 6, 2017
We find that CEOs release 20% more discretionary news items in months in which they are expected to sell equity, predicted using scheduled vesting months. These vesting months are determined by equity grants made several years prior, and thus unlikely driven by the current information environment. The increase arises for positive news, but not neutral or negative news, nor non-discretionary news. News releases fall in the month before and month after the vesting month. News in vesting months generates a temporary increase in stock prices and market liquidity, which the CEO exploits by cashing out shortly afterwards.
Keywords: Voluntary Disclosure, Equity Vesting, CEO Incentives, News
JEL Classification: G14, G34
Suggested Citation: Suggested Citation
Edmans, Alex and Goncalves-Pinto, Luis and Groen-Xu, Moqi and Wang, Yanbo, Strategic News Releases in Equity Vesting Months (January 6, 2017). NBER Working Paper No. w20476; European Corporate Governance Institute (ECGI) - Finance Working Paper No. 440/2014. Available at SSRN: https://ssrn.com/abstract=2489152 or http://dx.doi.org/10.2139/ssrn.2489152