This paper discusses the adoption of share-based compensation plans among Central and Eastern European (CEE) public companies composing major national stock exchange indices in Poland (WIG 20), the Czech Republic (PX) and Hungary (BUX). The analysis shows that the spread of such pay practices...

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...