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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | How do managers behave in stock option plans? Clinical evidence from exercise and survey data |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | The journal of financial research |
| Publisher | Wiley-Blackwell Publishing, Inc. |
| Geographical Reach | international |
| ISSN | 0270-2592 |
| Volume | 32 |
| Number | 2 |
| Page Range | 123 - 155 |
| Date | 2009 |
| Abstract Text | We use unique case study data to analyze the behavior of top managers in an executive stock option plan. We gather questionnaire data on the managers' traits and combine it with exercise data. Managers in our sample expect low volatilities (compared to historical estimates) and are well diversified and modestly risk averse. This implies that the value–cost wedge of options can be smaller than usually assumed. The exercise decisions vary with expected volatility, managerial wealth, and mental accounting. Managers expecting lower volatility exercise earlier. This result is consistent with the predictions of expected utility models using our managers' survey parameters. |
| Related URLs | |
| Digital Object Identifier | 10.1111/j.1475-6803.2009.01245.x |
| Other Identification Number | merlin-id:23861 |
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| Keywords | Finance, Accounting |