Discussion of 'are Executive Stock Options Associated with Future Earnings?'
Posted: 1 Dec 2003
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: Suggested Citation