An Empirical Analysis of Payout Policy and Option Expensing

The increased use of stock options as a compensation component and the subsequent failure of firms where their use was prevalent forced both Congress and the Financial Accounting Standards Board (FASB) to enact new legislation and regulations in 2002. Among other things, the new legislation required...

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Detalles Bibliográficos
Autor principal: Rogelio J. Cardona
Formato: Artículo científico
Publicado: Centro de Investigaciones Comerciales e Iniciativas Académicas 2009
Materias:
Administración y Contabilidad
Stock options
payout policy
dividends
share repurchases
Acceso en línea:http://www.redalyc.org/articulo.oa?id=63111799001
http://biblioteca.clacso.edu.ar/gsdl/cgi-bin/library.cgi?a=d&c=pr/pr-004&d=63111799001oai
Aporte de:
Red de Bibliotecas Virtuales de Ciencias Sociales (CLACSO) de Consejo Latinoamericano de Ciencias Sociales
id I16-R122-63111799001oai
record_format dspace
institution Consejo Latinoamericano de Ciencias Sociales
institution_str I-16
repository_str R-122
collection Red de Bibliotecas Virtuales de Ciencias Sociales (CLACSO)
topic Administración y Contabilidad
Stock options
payout policy
dividends
share repurchases
spellingShingle Administración y Contabilidad
Stock options
payout policy
dividends
share repurchases
Rogelio J. Cardona
An Empirical Analysis of Payout Policy and Option Expensing
topic_facet Administración y Contabilidad
Stock options
payout policy
dividends
share repurchases
description The increased use of stock options as a compensation component and the subsequent failure of firms where their use was prevalent forced both Congress and the Financial Accounting Standards Board (FASB) to enact new legislation and regulations in 2002. Among other things, the new legislation required corporations to disclose more information on their financial statements and initially to recognize voluntarily stock option grants as an expense on their financial statements. In 2004 option expensing became mandatory. This investigation uses Tobit regression models to examine whether there is a change in the payout policy (use a firm's cash to pay dividends to its stockholders or to repurchase outstanding shares from its shareholders) in a group of firms after announcing their voluntary decision to expense their stock options. The expected increases in the payment of dividends or share repurchases did not occur. Firms seem to have reacted to the required option expensing with other changes in their equity compensation plans such as accelerating the vesting of its options or by modifying the terms of its option grants.
format Artículo científico
Artículo científico
author Rogelio J. Cardona
author_facet Rogelio J. Cardona
author_sort Rogelio J. Cardona
title An Empirical Analysis of Payout Policy and Option Expensing
title_short An Empirical Analysis of Payout Policy and Option Expensing
title_full An Empirical Analysis of Payout Policy and Option Expensing
title_fullStr An Empirical Analysis of Payout Policy and Option Expensing
title_full_unstemmed An Empirical Analysis of Payout Policy and Option Expensing
title_sort empirical analysis of payout policy and option expensing
publisher Centro de Investigaciones Comerciales e Iniciativas Académicas
publishDate 2009
url http://www.redalyc.org/articulo.oa?id=63111799001
http://biblioteca.clacso.edu.ar/gsdl/cgi-bin/library.cgi?a=d&c=pr/pr-004&d=63111799001oai
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