1、Good Timing: CEO Stock Option Awards and Company News Announcements,David Yermack Presenter Yingru Jiang,Research Background,Executive Compensation Studies Findings: Incentive Plans Company Performance Larcker (1983), DeFusco, Johnson, and Zorn(1990),Incentive compensation motivate managers to make

2、superior decisions,Manager power influence their own compensation,Stock Option Award Process,Contents,Conclusion: CEO Timing the SOA,Discussion: Five Other Explanations,SOA 620 CEO stock option awards Model: Dodd and Warner (1983),II. SOA $48,900 after 50 trading days,II. SOA & Stock Price Movement,

3、Predictable: CEO receives options in each of two fiscal years, the awards separated by 11-13 months,Unpredictable: The remaining observations,D. Predictable and Unpredictable Award Schedules Over 50 Trading Day following the Award Date,Average CARs: 1.59% Significant,Average CARs: 3.27% Significant,

4、II. SOA & Stock Price Movement,E. CEO Influence as a Predictor of Postaward CARs,CEO serves as a committee member,CEO has low influence over the committee,F. Size and Timing of Stock Option Awards: Not clear,II. SOA & Stock Price Movement,E. CEO Influence as a Predictor of Postaward CARs,CEO has low

5、 influence over the committee,1. The most frequent day One day before announcement,III. SOA & Earnings Announcements,Award Date Relative to Nearest Announcement Date,2. The second frequent day The announcement day itself,Data source: Bloomberg, I/B/E/S,III. SOA & Earnings Announcements,Prior: Announ

6、cement day before Award day,Sequence: Announcement day after Award day,Test 1. Two groups test,Test 2. CAR test,Award date Announcement date,III. SOA & Earnings Announcements,III. SOA & Earnings Announcements,IV. Discussions,Not significant but negative ,Uncertainty,Legal issue,Violate laws Better alternatives Not empirically practical No accounting penalties relax,IV. Discussions, coefficient is estimated as -4.75 with a t-statistic of -1.25,Days after end of quarter to earnings announcement,Fisca