Corpus ID: 802903

Out-ofthe-Money CEOs : How Do Proxy Contests Affect Insider Option Exercises

@inproceedings{Vyacheslav2014OutoftheMoneyC,
  title={Out-ofthe-Money CEOs : How Do Proxy Contests Affect Insider Option Exercises},
  author={Vyacheslav},
  year={2014}
}

Vyacheslav

Published 2014

Business

When a proxy contest is looming, the rate at which CEOs exercise options in order to sell (hold) the resulting shares slows down by 80% (accelerates by 60%), consistent with their desire to maintain or strengthen voting rights when facing control challenges. Such deviations are closely aligned with features unique to proxy contests, e.g., the record dates and nomination status. Moreover, a contest triples the probability that an insider exercises options out-of-the-money, an irrational strategy… CONTINUE READING

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