This paper analyzes stock option wards to CEOs of 792 U.S. public corporations between 1984 and 1991. Using a Black-Scholes approach, I test whether stock options performance incentives have significant associations with explanatory variables related to agency cost reduction. Further tests...

This paper proposes and implements a new method for investigating whether CEOs influence the terms of their own compensation. I analyze the dates of 591 stock option awards to CEOs of Fortune 500 companies in 1992 and 1993, finding that the timing of awards coincides with favorable movements in...

This paper proposes and implements a new method for investigating whether CEOs influence the terms of their own compensation. I analyze the dates of 619 stock option awards to CEOs of Fortune 500 companies between 1992 and 1994, finding that the timing of awards coincides with favorable...

We investigate whether convertibility provisions and restrictive covenants operate as substitute methods for reducing agency costs of debt. In a study of the 192 recent debt issues, we find that an issuer s investment opportunities are negatively related to the presence of covenants and...

We test the prediction that leverage is inversely associated with managerial entrenchment. We examine leverage levels and year-to-year changes for several hundred firms between 1984 and 1991. We find that leverage levels are positively related to CEO stock ownership and CEO stock option...

We investigate a puzzling empirical regularity: the near-total absence of restrictive covenants from convertible bonds issued by U.S. companies. In a study of 192 recent debt issues, we find that an issuer s investment opportunities are negatively related to the presence of covenants and...

We study contracts negotiated between professional baseball players and teams to investigate the use of real options in a commercial setting. Baseball contracts feature options in diverse forms, and we find that these options have significant effects on player compensation. As predicted by...

We study contracts negotiated between professional baseball players and teams to investigate the use of real options in a commercial setting. Baseball contracts feature options in diverse forms, and we find that these options have significant effects on player compensation. As predicted by...

This paper examines the practice of resetting of the terms of previously-issued executive stock options. We identify the properties of the typical reset option, characterize the firms that have reset options, and develop a model to value options that may be reset. In our sample of 396 executives...

We study executive stock options that permit the option holder to rescind an exercise decision, returning the shares acquired to the company and obtaining a refund of the exercise price. Rescissions occurred at a number of U.S. companies in 2000 after the large decline in internet stocks, and...