CEO opportunism?: : Option grants and stock trades around stock splits

• Autores: Erik Devos, William B. Elliott, Richard S. Warr
• Localización: Journal of accounting and economics, ISSN 0165-4101, Vol. 60, Nº. 1, 2015, págs. 18-35
• Idioma: inglés
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• Resumen

  • Decades of research confirm that, on average, stock split announcements generate positive abnormal returns. In our sample, 80% of CEO stock option grants are timed to occur on or before the split announcement date. With the average market-adjusted announcement return of 3.1%, awarding the grant before the split announcement results in an average gain per CEO-grant of $451,748. We find additional evidence consistent with timing of CEO stock trading around the split announcement. In the case of CEO stock sales, about two-thirds occur after the split announcement, resulting in an average gain of $345,613