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- W1720791815 abstract "Purpose – The purpose of this study is to explore post-acquisition compensation management and examine how the two most commonly used theories to explain CEO stock option exercise, agency theory and CEO overconfidence, expect CEOs to manage their stock options following an acquisition. Design/methodology/approach – Using logistic regression analysis, the authors investigate whether CEOs are more or less likely to exercise options following an acquisition, and the effect which CEO tenure and acquisition history may have on option exercise. Findings – The results suggest that CEOs are more likely to exercise options following an acquisition. The authors also find that CEO tenure and acquisition experience are both linked to an increase in option exercise. Research limitations/implications – The findings suggest that future research should expect agency effects to outweigh overconfidence effects when considering CEO stock option exercise behavior within the post-acquisition firm context. Practical implications – This paper advises directors and shareholders about whether agency concerns or overconfidence are of greater concern and how CEO tenure and past acquisition history may influence post-acquisition CEO stock option exercise behavior, offering information valuable in designing effective corporate governance. Originality/value – This paper is among the first to explore how CEOs manage their options following an acquisition and finds that CEOs are more likely to exercise stock options following an acquisition. Post-acquisition compensation management is an important, though overlooked, consideration in improving acquisition performance." @default.
- W1720791815 created "2016-06-24" @default.
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- W1720791815 date "2015-10-19" @default.
- W1720791815 modified "2023-09-23" @default.
- W1720791815 title "Cashing-in: understanding post-acquisition CEO stock option exercise" @default.
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- W1720791815 doi "https://doi.org/10.1108/md-03-2015-0091" @default.
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