Information Distribution within Firms: Evidence from Stock Option Exercises

Posted: 14 Oct 2002

See all articles by Steven J. Huddart

Steven J. Huddart

Pennsylvania State University, University Park - Department of Accounting

Mark H. Lang

University of North Carolina at Chapel Hill

Multiple version iconThere are 2 versions of this paper

Abstract

We examine the stock option exercise decisions of over 50,000 employees at seven corporations to provide evidence on the distribution of price-relevant non-public information among employees. When option exercise (adjusted for other factors affecting exercise) is low, stock returns in the coming six months are 10% higher than when option exercise is high. The exercise decisions of relatively junior employees contain at least as much price-relevant information as the exercise decisions of more senior employees.

Keywords: accounting, compensation, disclosure, regulation, securities

JEL Classification: D82, G28, J33, K22

Suggested Citation

Huddart, Steven J. and Lang, Mark H., Information Distribution within Firms: Evidence from Stock Option Exercises. Journal of Accounting and Economics, Vol. 34, Nos. 1-3, pp. 3-31, January 2003. Available at SSRN: https://ssrn.com/abstract=332102

Steven J. Huddart (Contact Author)

Pennsylvania State University, University Park - Department of Accounting ( email )

University Park, PA 16802-3603
United States
814-863-0448 (Phone)

HOME PAGE: http://directory.smeal.psu.edu/sjh11

Mark H. Lang

University of North Carolina at Chapel Hill ( email )

Kenan-Flagler Business School
McColl Building
Chapel Hill, NC 27599-3490
United States
919-962-1644 (Phone)
919-962-4727 (Fax)

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