Does the size and holding concentration of executive options scheme have consequences for firm financial performance?

Tyrone M. Carlin, Guy Ford

Research output: Contribution to journalConference paper

Abstract

Executive options represent a phenomenon of particular economic significance. Just as their use has ballooned over the past decade, so too has the literature concerning their nature, cost and impact. However, despite the growth in the volume of literature devoted to the topic of executive options, there appears to be little agreement as to the performance impact brought about in consequence of the decision by firms to introduce executive options into their remuneration mixes. This paper contributes to the literature by providing evidence relating to the impact of options plans on firm financial performance. In particular, evidence is presented which suggests that option plan size (as measured by the portion of outstanding equity capital covered by options grants) and options holding concentration (the degree to which options granted under a plan are concentrated into the hands of the firm’s most senior managers) have a significant impact on the manner in which executive options plans impact on firm financial performance.
Original languageEnglish
Pages (from-to)1-34
Number of pages34
JournalProgram and collected abstracts of the Accounting Association of Australia and New Zealand annual conference
Publication statusPublished - 2006
EventAccounting Association of Australia and New Zealand Conference (2006) - Wellington, New Zealand
Duration: 2 Jul 20064 Jul 2006

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Keywords

  • executive options
  • financial performance
  • holding concentration

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