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CEO opportunism?: Option grants and stock trades around stock splits

Listed author(s):
  • Devos, Erik
  • Elliott, William B.
  • Warr, Richard S.
Registered author(s):

    Decades of research confirm that, on average, stock split announcements generate positive abnormal returns. In our sample, 80% of CEO stock option grants are timed to occur on or before the split announcement date. With the average market-adjusted announcement return of 3.1%, awarding the grant before the split announcement results in an average gain per CEO-grant of $451,748. We find additional evidence consistent with timing of CEO stock trading around the split announcement. In the case of CEO stock sales, about two-thirds occur after the split announcement, resulting in an average gain of $345,613.

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    File URL: http://www.sciencedirect.com/science/article/pii/S016541011500018X
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    Article provided by Elsevier in its journal Journal of Accounting and Economics.

    Volume (Year): 60 (2015)
    Issue (Month): 1 ()
    Pages: 18-35

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    Handle: RePEc:eee:jaecon:v:60:y:2015:i:1:p:18-35
    DOI: 10.1016/j.jacceco.2015.02.004
    Contact details of provider: Web page: http://www.elsevier.com/locate/jae

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