Stock Option Repricing and its Alternatives

Download or read book Stock Option Repricing and its Alternatives written by Swaminathan L. Kalpathy and published by . This book was released on 2007 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: Studies on determinants of stock option repricing contrast repricers with firms that do not conduct repricings. In practice, firms resort to other alternatives to retain managers and to restore incentives. We examine a broad array of alternatives that includes repricings, stock option grants, restricted stock grants, and the neutral alternative of doing nothing. Multinomial logit results suggest that firms reprice CEO stock options in response to economic factors. We address the debate on whether agency conflicts between managers and shareholders are severe in repricing firms, and do not find evidence that repricers are characterized by weak boards or entrenched managers.