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Exercises of Executive Stock Options on the Vesting Date
Author(s) -
Fu Xudong,
Ligon James A.
Publication year - 2010
Publication title -
financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.647
H-Index - 68
eISSN - 1755-053X
pISSN - 0046-3892
DOI - 10.1111/j.1755-053x.2010.01105.x
Subject(s) - vesting , stock options , diversification (marketing strategy) , portfolio , business , stock (firearms) , executive summary , actuarial science , finance , economics , political science , geography , marketing , archaeology , law
We investigate the motives for executives to exercise executive stock options on the options’ vesting date versus a later early exercise. We find that executives frequently exercise on the vesting date, executives with a greater need for portfolio diversification and riskier underlying stocks are more likely to exercise their options on the vesting date versus a later early exercise, and private information appears less relevant to vesting date exercises.