Discussion of 'are Executive Stock Options Associated with Future Earnings?'

Posted: 1 Dec 2003

See all articles by David F. Larcker

David F. Larcker

Stanford University - Graduate School of Business

Abstract

Hanlon, Rajgopal, and Shevlin conclude that grant of stock options to executives is associated with a positive impact on future operating performance. This discussion comment examines the impact of endogeneity, model structure, and the choice of a benchmark model on this conclusion. While some results indicate that there is a position relation between stock option grants and operating performance, alternative econometric approaches produce distinctly different results.

Keywords: stock options, econometric methods

JEL Classification: J33, M41, C00

Suggested Citation

Larcker, David F., Discussion of 'are Executive Stock Options Associated with Future Earnings?'. Journal of Accounting & Economics, Vol. 36, Nos. 1-3, pp. 91-103, December 2003. Available at SSRN: https://ssrn.com/abstract=474383

David F. Larcker (Contact Author)

Stanford University - Graduate School of Business ( email )

Graduate School of Business
518 Memorial Way
Stanford, CA 94305-5015
United States
650-725-6159 (Phone)

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