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- Title
THE ROLE OF POWER AND POLITICS IN THE REPRICING OF EXECUTIVE OPTIONS.
- Authors
Pollock, Timothy G.; Fischer, Harald M.; Wade, James B.
- Abstract
We explore how CEO power affects the repricing of executive options. The spread between an option's exercise, or strike, price, and the market value of a stock impacts the likelihood of repricing. This effect is enhanced when the CEO of the firm in question is also the chairman of its board. Firm and CEO visibility, more board members appointed after a CEO's hiring than before it, a staggered board, and relatively high percentages of CEO and institutional ownership reduce the impact of the spread on the likelihood of repricing.
- Subjects
CHIEF executive officers; MARKET value; STOCK prices; STOCK options; EMPLOYEE stock options; EXECUTIVE compensation; CHAIRMAN of the board; INSTITUTIONAL ownership (Stocks); ORGANIZATIONAL behavior; DECISION making; RISK aversion
- Publication
Academy of Management Journal, 2002, Vol 45, Issue 6, p1172
- ISSN
0001-4273
- Publication type
Article
- DOI
10.5465/3069432