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The sensitivity of CEO wealth to equity risk: an analysis of the magnitude and determinants ☆
Abstract To control risk-related incentive problems, equity holders are expected to manage both the convexity and slope of the relation between firm performance and managers’ wealth. I find stockExpand
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The Use of Equity Grants to Manage Optimal Equity Incentive Levels
We predict and find that firms use annual grants of options and restricted stock to CEOs to manage the optimal level of equity incentives. We model optimal equity incentive levels for CEOs, and useExpand
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Estimating the Value of Employee Stock Option Portfolios and Their Sensitivities to Price and Volatility
The costs associated with compiling data on employee stock option portfolios is a substantial obstacle in investigating the impact of stock options on managerial incentives, accounting choice,Expand
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The Role of Information and Financial Reporting in Corporate Governance and Debt Contracting
We review recent literature on the role of financial reporting transparency in reducing governance-related agency conflicts among managers, directors, and shareholders, as well as in reducing agencyExpand
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Stock Option Plans for Non-Executive Employees
We examine determinants of non-executive employee stock options outstanding, grants, and exercises for 756 firms during 1994 to 1997. We find that firms use greater stock option compensation whenExpand
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The Power of the Pen and Executive Compensation
We examine the press' role in monitoring and influencing executive compensation practice using more than 11,000 press articles about CEO compensation from 1994 to 2002. Negative press coverage isExpand
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The Role of the Business Press as an Information Intermediary
ABSTRACT This paper investigates whether the business press serves as an information intermediary. The press potentially shapes firms' information environments by packaging and disseminatingExpand
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Is Accruals Quality a Priced Risk Factor
In a recent and influential empirical paper, Francis, LaFond, Olsson, and Schipper (FLOS) [2005. The market pricing of accruals quality. Journal of Accounting and Economics 39, 295-327] conclude thatExpand
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How Much Do Firms Hedge with Derivatives
Previous research offers little large-sample evidence on the magnitude of non-financial firms' risk exposure hedged by financial derivatives. Among 234 large non-financial derivatives users, if theExpand
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The impact of derivatives on firm risk: An empirical examination of new derivative users 1 I gratefu
The appropriateness of rules governing the financial reporting of derivatives securities depends critically on corporations' intended purpose for holding these instruments. Empirically, however,Expand
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