CEO Stock-Based Compensation: An Empirical Analysis of Incentive-Intensity, Relative Mix, and Economic Determinants
The use of stock-based compensation for U.S. CEOs has increased significantly throughout the 1990s. Research interest, in particular on stock option compensation, has similarly increased, yet contradictory results create questions about the theoretical underpinnings. Therefore, we revisit the controversy surrounding stock option awards, and we further the understanding of restricted stock grants, which have escaped similar research focus. Using a recent data set, we obtain convincing empirical support for most theoretical predictions about stock option awards. We also find that restricted stock, due to its linear payoffs, is relatively inefficient in inducing risk-averse CEOs to accept risky, value-increasing investment projects. Copyright 2000 by University of Chicago Press.
When requesting a correction, please mention this item's handle: RePEc:ucp:jnlbus:v:73:y:2000:i:4:p:661-93. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division)
If references are entirely missing, you can add them using this form.