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https://hdl.handle.net/2440/62351
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Type: | Journal article |
Title: | Is there an optimum grant size and exercise price for incentivizing executives? |
Author: | Canil, J. Rosser, B. |
Citation: | Corporate Board: role, duties and composition, 2010; 6(1):6-18 |
Publisher: | Virtus Interpress |
Issue Date: | 2010 |
ISSN: | 1810-8601 2312-2722 |
Statement of Responsibility: | Jean M. Canil and Bruce A. Rosser |
Abstract: | <jats:p>This study tests the Hall and Murphy (2000, 2002) propositions using a dataset wherein in-the money and out-of-the-money option grants are just as prevalent as at-the-money option grants. The choice of grant size and exercise price in determining optimal pay-performance sensitivity, reveals an over prescription of at-the-money options at the expense of in-the-money options, particularly for high risk-averse CEOs. Also, pay-performance sensitivity is found unexpectedly negatively related to the exercise price, which is attributed to an equally unexpected inverse relation between risk aversion and grant size.</jats:p> |
Rights: | Copyright 2010 Virtus Interpress. All rights reserved. |
DOI: | 10.22495/cbv6i1art1 |
Published version: | http://dx.doi.org/10.22495/cbv6i1art1 |
Appears in Collections: | Aurora harvest Business School publications |
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