next dating show - Option backdating board interlocks
We document a positive association between directors’option compensation and the likelihood that Director compensation has been the subject of heated debate for more than two decades.
In 1980s, corporate reformers and some large institutional investors argued that options would help motivate directors to focus on shareholder returns by giving them ownership incentives.
In some sense, CGL is the culmination of this research line.
The conceptual premise of the paper is that the backdating of CEO stock option grants is a direct consequence of “weak ” corporate governance structures.
The authors make directional predictions about the relation between firms ’ individual governance structures and the probability that stock option backdating occurs.
Stock options granted to direc ..." This paper investigates how directors’incentives play a role in the occurrences of firms’backdating employee stock options.
Stock options granted to directors are supposed to provide incentives to directors to guard the firm from engaging in shareholder value destroying activities.
The authors then predict the probability of backdating to be an increasing function of the metric representing each individual governance structure.