The association between employee stock option disclosures and corporate governance: Evidence from an enhanced disclosure regime

British Accounting Review

Volumn 39, Issue 4, 2007, Pages 303-322

  Bassett, Michael ^a   Koh, Ping Sheng ^b   Tutticci, Irene ^a  

^a UNIVERSITY OF QUEENSLAND   (Australia)

^b HONG KONG UNIVERSITY OF SCIENCE AND TECHNOLOGY   (Hong Kong)

Author keywords

Corporate governance; Employee stock option disclosure; Mandatory disclosure; Voluntary disclosure

Indexed keywords

EID: 36448972658     PISSN: 08908389     EISSN: 10958347     Source Type: Journal    
DOI: 10.1016/j.bar.2007.06.003     Document Type: Article

References (52)

1. Aboody D. Market valuation of employee stock options. Journal of Accounting and Economics 22 (1996) 357-391
2. Aboody D., and Kasznik R. CEO stock option awards and corporate voluntary disclosures. Journal of Accounting and Economics 29 1 (2000) 73-100
3. Aboody D., Barth M.E., and Kasznik R. SFAS no. 123 stock-based compensation expense and equity market values. The Accounting Review 79 2 (2004) 251-275
4. Agrawal A., and Chadha S. Corporate governance and accounting scandals. Journal of Law and Economics 48 20 (2005) 371-406
5. Australian Accounting Standards Board (AASB). AASB 1028 Employee Benefits (1994), AASB, Melbourne
6. Australian Accounting Standards Board (AASB). AASB 1028 Employee Benefits (2001), AASB, Melbourne
7. Australian Accounting Standards Board (AASB). ED 108 Request for Comment on IASB ED2 Share-based Payment (2002), AASB, Melbourne
8. Australian Accounting Standards Board (AASB). AASB 2 Share-based Payment (2004), AASB, Melbourne
9. Australian Stock Exchange (ASX) Corporate Governance Council. Principles of Effective Corporate Governance and Best Practice Recommendations (2003), Australian Stock Exchange, Sydney
10. Chalmers, K., Koh, P.-S., 2005. Market reaction to the announcement of enforcement regime change: disclosure of executive option values. Working Paper, Monash University and Hong Kong University of Science & Technology.
11. Chalmers K., Koh P.-S., and Stapledon G. The determinants of CEO compensation: rent extraction or labour demand?. The British Accounting Review 38 3 (2006) 259-275
12. Chen C.P., and Jaggi B. Association between independent non-executive directors, family control and financial disclosures in Hong Kong. Journal of Accounting and Public Policy 19 (2000) 285-310
13. Clarkson P.M., Kao J.L., and Richardson G.D. Evidence that management discussion and analysis (MD&A) is a part of a firm's overall disclosure package. Contemporary Accounting Research 16 1 (1999) 111-134
14. Collier P., and Gregory A. Audit committee activity and agency costs. Journal of Accounting and Public Policy 18 (1999) 311-332
15. Conyon M.J., Malin C., and Sadler G. The disclosure of directors' share option information in UK companies. Applied Financial Economics 12 2 (2002) 95-103
16. Core J.E., and Guay W.R. Stock option plans for non-executive employees. Journal of Financial Economics 61 (2001) 253-287
17. Core J.E., Holthausen R.W., and Larcker D.F. Corporate governance, chief executive officer compensation and firm performance. Journal of Financial Economics 51 (1999) 371-406
18. Cotter J., Shivadasani A., and Zenner M. Do independent directors enhance target shareholder wealth during tender offers?. Journal of Financial Economics 43 (1997) 195-218
19. Coulton, J., James, C., Taylor, S., 2001. The effect of compensation design and corporate governance on the transparency of CEO compensation disclosures. Working Paper, University of Technology, Sydney and University of Sydney.
20. DeAngelo L. Auditor size and audit quality. Journal of Accounting and Economics 3 (1981) 183-199
21. DeFond M.L., and Jiambalvo J. Circumstances of accounting errors. The Accounting Review 66 3 (1991) 643-655
22. Efendi, J., Srivastava, A., Swanson, E.P., 2007. Why do corporate managers misstate financial statements? The role of in-the-money options and other incentives. Journal of Financial Economics, forthcoming, doi:10.1016/j.jfineco.2006.05.009.
23. Einhorn E. The nature of the interaction between mandatory and voluntary disclosures. Journal of Accounting Research 43 4 (2005) 593-621
24. Elayan F.A., Pukthuanthong K., and Roll R. Investors like firms that expense employee stock options and they dislike firms that fail to expense. Journal of Investment Management 3 1 (2005) 75-98
25. Eng L.L., and Mak Y.T. Corporate governance and voluntary disclosure. Journal of Accounting and Public Policy 22 (2003) 325-345
26. Fama E. Agency problems and the theory of the firm. Journal of Political Economy 88 2 (1980) 288-307
27. Fama E., and Jensen M. Separation of ownership and control. Journal of Law and Economics 26 (1983) 301-326
28. Feroz E.H., Park K., and Pastena V.S. The financial and market effects of the SEC's accounting and auditing enforcement releases. Journal of Accounting Research 29 (1991) 107-142
29. Forker J.J. Corporate governance and disclosure quality. Accounting and Business Research 22 86 (1992) 111-124
30. Goldman E., and Slezak S.L. An equilibrium model of incentive contracts in the presence of information manipulation. Journal of Financial Economics 80 (2006) 603-626
31. Gompers P., Ishii J., and Metrick A. Corporate governance and equity prices. Quarterly Journal of Economics 118 1 (2003) 107-156
32. Greene W.H. Econometric Analysis (2003), Pearson Education, New Jersey
33. Hossain M., Tan L.M., and Adams M.B. Voluntary disclosure in an emerging capital market: some empirical evidence from companies listed on the Kuala Lumpur stock exchange. The International Journal of Accounting 29 4 (1994) 334-351
34. Hossain M., Perera M.H.B., and Rahman A.R. Voluntary disclosures in the annual reports of New Zealand companies. Journal of International Financial Management and Accounting 6 1 (1995) 69-87
35. International Accounting Standards Board (IASB). ED 2 Share-based Payment (2002), IASB, London
36. Jensen M.C. The modern industrial revolution, exit, and the failure of internal control systems. The Journal of Finance 48 3 (1993) 831-880
37. Jensen M.C., and Meckling W.H. Theory of the firm: management behavior, agency costs and ownership structure. Journal of Financial Economics 3 4 (1976) 305-360
38. Jensen, M.C., Murphy, K.J., Wruck, E.G., 2004. Remuneration: where we've been, how we got to here, what are the problems, and how to fix them. Harvard NOM Working Paper, available from the SSRN eLibrary at: 〈http://ssrn.com/abstract=561305〉.
39. Kennedy P. A Guide to Econometrics. third ed (1992), Basil Blackwell Ltd., Oxford, UK
40. Koh P.-S., Laplante S.K., and Tong Y.H. Accountability and value creation roles of corporate governance. Accounting and Finance 47 2 (2007) 305-333
41. Lang M., and Lundholm R. Cross-sectional determinants of analyst ratings of corporate disclosures. Journal of Accounting Research 31 2 (1993) 246-271
42. Lang M., and Lundholm R. Corporate disclosure policy and analyst behaviour. The Accounting Review 71 4 (1996) 467-492
43. Larcker, D.F., Rusticus, T.O., 2005. On the use of instrumental variables in accounting research. Working Paper, University of Pennsylvania.
44. Maddala G.S. Limited Dependent and Qualitative Variables in Econometrics (1983), Cambridge University Press, Cambridge
45. Meek G.K., and Gray S.J. Globalization of stock markets and foreign listing requirements: voluntary disclosure by continental European companies listed on the London stock exchange. Journal of International Business Studies 20 2 (1989) 315-338
46. Nelson, J., Percy, M., 2004. The quality of executive stock options disclosures in Australian annual reports. Working Paper, Queensland University of Technology.
47. Oyer P., and Schaefer S. Why do some firms give stock options to all employees?: an empirical examination of alternative theories. Journal of Financial Economics 76 (2005) 99-133
48. Palmrose Z.-V. An analysis of auditor litigation and audit service quality. The Accounting Review 63 1 (1988) 55-73
49. Teoh S.H., and Wong T.J. Perceived auditor quality and the earnings response coefficient. The Accounting Review 68 2 (1993) 346-366
50. Turley S., and Zaman M. The corporate governance effects of audit committees. Journal of Management and Governance 8 (2004) 305-322
51. Verrechia R.E. Discretionary disclosure. Journal of Accounting and Economics 5 (1983) 179-194
52. Yermack D. Higher market valuation of companies with a small board of directors. Journal of Financial Economics 40 (1996) 185-211