Optimal executive compensation: Stock options or restricted stocks

International Review of Economics and Finance

Volumn 20, Issue 4, 2011, Pages 633-644

  Wu, Yan Wendy ^a  

^a WILFRID LAURIER UNIVERSITY   (Canada)

Author keywords

Corporate governance; Executive compensation; Information manipulation; Stock option

Indexed keywords

EID: 79957564966     PISSN: 10590560     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.iref.2010.11.023     Document Type: Article

References (36)

1. Andergassen R. High-powered incentives and fraudulent behavior: Stock-based versus stock option-based compensation. Economics Letters 2008, 101:122-125.
2. Burns N., Kedia S. The impact of performance-based compensation on misreporting. Journal of Financial Economics 2006, 79:35-67.
3. Bergstresser D., Philippon T. CEO incentives and earnings management. Journal of Financial Economics 2006, 80:511-529.
4. Bolton P., Scheinkman J., Xiong W. Executive compensation and short-termist behaviour in speculative markets. Review of Economic Studies 2006, 73:577-610.
5. Bryan S., Nash R., Patel A. The structure of executive compensation: International evidence from 1996-2004. Working Paper 2006, Wake Forest University.
6. Cadenillas A., CvitaniĆ J., Zapatero F. Leverage decision and manager compensation with choice of effort and volatility. Journal of Financial Economics 2004, 73:71-92.
7. Chen S., Lin B., Wang Y., Wu L. The frequency and magnitude of earnings management: Time-series and multi-threshold comparisons. International Review of Economics and Finance 2010, 19:671-685.
8. Cheng Q., Warfield T. Equity incentives and earnings management. The Accounting Review 2005, 80:441-476.
9. Crocker K., Slemrod J. The economics of earnings manipulation and managerial compensation. Rand Journal of Economics 2007, 38:698-713.
10. Darrough M., Stoughton N. Moral hazard and adverse selection: The question of financial structure. Journal of Finance 1986, 41:501-513.
11. Dittmann I., Maug E. Lower salaries and no options? On the optimal structure of executive pay. Journal of Finance 2007, 62:303-343.
12. Dong J., Gou Y. Corporate governance structure, managerial discretion, and the R&D investment in China. International Review of Economics and Finance 2010, 19:180-188.
13. DuCharme L., Malatesta P., Sefcik S. Earnings management, stock issues, and shareholder lawsuits. Journal of Financial Economics 2004, 71:27-49.
14. Efendi J., Srivastava A., Swanson E. Why do corporate managers misstate financial statements? The role of option compensation and other factors. Journal of Financial Economics 2007, 85:667-708.
15. Feltham G., Wu M. Incentive efficiency of stock versus options. Review of Accounting Studies 2001, 6:7-28.
16. Gjesdal F. Accounting for stewardship. Journal of Accounting Research 1981, 208-231.
17. Goldman E., Slezak S. An equilibrium model of incentive contracts in the presence of information manipulation. Journal of Financial Economics 2006, 80:603-626.
18. Grossman S., Hart O. An analysis of the principal-agent problem. Econometrica 1983, 51:7-45.
19. Hall B., Murphy K. Optimal exercise prices for executive stock options. American Economic Review 2000, 90:209-214.
20. Hall B., Murphy K. Stock options for undiversified executives. Journal of Accounting and Economics 2002, 33:3-42.
21. Jewitt I. Justifying the first-order approach to principal-agent problems. Econometrica 1988, 56:1177-1190.
22. Johnson S., Tian Y. The value and incentive effects of nontraditional executive stock option plans. Journal of Financial Economics 2000, 57:3-34.
23. Jones R., Wu Y. Executive compensation, earnings management and shareholder litigation. Review of Quantitative Finance and Accounting 2010, 35:1-20.
24. Kadan O., Swinkels J. Stocks or options? Moral hazard, firm viability, and the design of compensation contracts. Review of Financial Studies 2008, 21:451-482.
25. Lambert R., Larcker D. Stock options, restricted stock, and incentives Available at SSRN. http://ssrn.com/abstract=527822.
26. Lambert R., Larcker D., Verrecchia R. Portfolio considerations in valuing executive compensation. Journal of Accounting Research 1991, 29:129-149.
27. Louis H. Earnings management and the market performance of acquiring firms. Journal of Financial Economics 2004, 74:121-148.
28. Meulbroek L. The efficiency of equity-linked compensation: Understanding the full cost of awarding executive stock options. Financial Management 2001, 30:5-30.
29. Milbourn T. CEO reputation and stock-based compensation. Journal of Financial Economics 2003, 68:233-262.
30. Lie E. On the timing of CEO stock option awards. Management Science 2005, 51:802-812.
31. Palmon O., Bar-Yosef S., Chen R., Venezia I. Optimal strike prices of stock options for effort-averse executives. Journal of Banking and Finance 2008, 32:229-239.
32. Peng L., Röell A. Executive pay and shareholder litigation. Review of Finance 2008, 12:141-184.
33. Peng L., Röell A. Managerial incentives and stock price manipulation Available at SSRN. http://ssrn.com/abstract=1321903.
34. Robison H., Santore R. Managerial incentives, fraud, and monitoring Available at SSRN. http://ssrn.com/abstract=770924.
35. Xie F. Managerial flexibility, uncertainty, and corporate investment: The real options effect. International Review of Economics and Finance 2009, 18:643-655.
36. Yermack D. Good timing: CEO stock option awards and company news announcements. Journal of Finance 1997, 52:449-476.