1 / 1

Corporate Governance and Stock Option Program Design: Insights from European Data

This seminar at the University of Oxford's Said Business School explores the intricate relationship between corporate governance structures and the design of employee stock option (ESO) programs. Utilizing a unique dataset from Europe, the research critically assesses how ownership concentration and board structure influence ESO design, particularly under the managerial power hypothesis. Findings suggest that lower ownership concentration and weaker creditor rights correlate with poorly designed option plans, highlighting significant implications for corporate governance and managerial accountability.

hayden-gordon
Download Presentation

Corporate Governance and Stock Option Program Design: Insights from European Data

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. GRADUATE SCHOOL OF MANAGEMENT • ZACHARIAS SAUTNER, • University of Oxford, • SaidBusiness School, • December 12,2005 • 10:45 - 12:00 Seminar • GSM Building Room : 1073 • Subject:“Corporate Governance and the Design of Stock Option Programs” • ABSTRACT • Investors and academics increasingly criticize that features of employee stock option (ESO) programs reflect rent-extraction by managers (managerial power view). We use a unique European dataset to investigate the relationship between the design of ESO programs and corporate governancestructures. We find that ownership structures are related to the ESO design in a way that is consistent with the managerial power hypothesis: when ownership concentration is low and the expositionto the U.S. capital market is little, executives extract rents by designing poor ESO plans. Moreover, firms with weak creditor rights more often have badly designed option plans. Our findings also suggestthat ineffective board structures (insider-dominated boards) are related to ESO design in a way thatsupports the arguments of the self-dealing view. YBF

More Related