We empirically investigate the adoption of stock option plans in Japan after the corporate governance reforms of the early 2000s. We examine the determinants of stock option grants, especially focusing on the effects of herding behavior among Japanese firms and the change of accounting treatment...

Equity-based compensation causes increases in firms' share count and dilutes Earnings Per Share (EPS), which provides firms with an incentive to raise EPS using either share buybacks or earnings management. We employ a regression discontinuity framework to provide evidence of a causal link...

In this paper, we have looked at the choice of performance targets using a unique panel database on UK CEO executive option performance targets. Using this data on performance targets along with governance data and financial data for company accounts with year ends from 2001 to 2003, we find...

In the present paper, we analyze two effective non-traditional performance-based stock option schemes which we call Parisian and constrained Asian executives' stock option plans. Both options have a criterion on the terminal value similar to a call option, but in addition impose a restriction on...

This paper investigates how shocks to expected cash flows influence CEO incentive compensation. Exploiting changes in compliance with environmental regulations as shocks to expected future cash flows, we find that adverse shocks typically prompt corporate boards to recalibrate CEO compensation...

I develop measures of firm-level pay disparity and examine their relation to firm performance. Using comprehensive compensation data for a large sample of firms, I find no statistically significant relation between the ratio of CEO-to-mean employee compensation and performance. I next create...