Managerial gaming of stock and option grants

Q1 Economics, Econometrics and Finance

Financial Markets, Institutions and Instruments Pub Date : 2017-07-14 DOI:10.1111/fmii.12081

Yisong S. Tian

引用次数: 3

Abstract

In this paper, we examine managerial gaming of different types of equity grants, both at the initial award of the equity grants (front-end gaming) and the unwinding of the equity holdings in the future (back-end gaming). We find that the potential gains from stock price manipulation vary substantially across different types of equity grants. While traditional stock option grants are less vulnerable to front-end gaming, they are more vulnerable to back-end gaming than other types of equity grants (e.g., restricted stock grants). To prevent or discourage managerial gaming, firms should preset all terms of the equity grant in advance and link its future payoff to average stock prices (e.g., by granting Asian stock options).

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股票和期权授予的管理博弈

在本文中，我们研究了不同类型的股权授予的管理博弈，包括股权授予的初始奖励(前端博弈)和未来股权持有的解除(后端博弈)。我们发现，股价操纵的潜在收益在不同类型的股权授予中差异很大。虽然传统的股票期权授予不太容易受到前端博弈的影响，但与其他类型的股权授予(如限制性股票授予)相比，它们更容易受到后端博弈的影响。为了防止或阻止管理层的赌博行为，公司应该预先设定股权授予的所有条款，并将其未来的收益与平均股价挂钩(例如，通过授予亚洲股票期权)。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Financial Markets, Institutions and Instruments Economics, Econometrics and Finance-Economics, Econometrics and Finance (all)

CiteScore

1.80

自引率

0.00%

发文量

期刊介绍： Financial Markets, Institutions and Instruments bridges the gap between the academic and professional finance communities. With contributions from leading academics, as well as practitioners from organizations such as the SEC and the Federal Reserve, the journal is equally relevant to both groups. Each issue is devoted to a single topic, which is examined in depth, and a special fifth issue is published annually highlighting the most significant developments in money and banking, derivative securities, corporate finance, and fixed-income securities.