While existing literature on equity-based compensation is focused heavily on stock option and restricted stock awards that carry simple time-based vesting restrictions, we find that more complicated performance-based vesting provisions are quite common. We construct and analyze a novel dataset...

This paper analyzes lawsuits in which at least one side, plaintiff or defendant, is a corporation. In particular, we provide evidence on the relative frequency of the legal issues involved, the incidence of suits by whether the opponent is another firm, governmental entity, or non- corporate...

Employees tend to exercise stock options when corporate taxable income is high, shifting corporate tax deductions to years with higher tax rates. If firms paid employees the same dollar value in wages instead of stock options, we estimate that the average annual tax bill for large US companies...

We test whether market-timing strategies using deviations from the long-run log consumption-wealth ratio (cay) deliver superior investment perfomance. Using several statistical tests, we conclude that true cay contains economically significant information about future market returns. However,...

I show that share repurchases increase pay-performance sensitivity of employee compensation and lead to greater employee effort and higher stock prices. Consistent with the model, I find that after repurchases employees and managers receive fewer stock option and equity grants, and that the...

Exercises of employee stock options generate substantial cash inflows to the firm. These cash inflows substitute for costly external finance in those states of the world in which the demand for investment is high. Using the fact that the proceeds from option exercises exhibit a distinct...