Option backdating and board interlocks No credit card web sex chat
JEL classification: J22; M52 evidence canadian public firm ceo manipulation stock-option grant stock option grant large canadian firm sarbanes-oxley act canadian firm u.s.
DIRECTORS of corporations often form a tight-knit community, serving at more than one company and creating what are known as interlocking boards of directors.
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Our results show that the introduction of the two-day filing requirement following the Sarbanes-Oxley Act (SOX) has eliminated backdating practice by Canadian firms cross-listed in the U. Most importantly, we find that cross-listed firms are likely to set stock option grants in harmony with the day-of-the-week effect.
Our study suggests that Canadian regulators should at least adopt the SEC-initiated change and should also introduce new regulations that enhance the monitoring role of board of directors.
The study's authors are two finance professors, John M.
Bizjak of Portland State University in Oregon and Michael L.
Federal prosecutors and the Securities and Exchange Commission are investigating numerous companies in connection with options backdating.
We study a model where managers can exert unobservable cost-cutting effort and investigate the consequences of and the incentives for coordinating managerial pay among corporate boards.
Using a sample of unscheduled stock options granted to CEOs of large Canadian firms, we find reliable evidence of option grants manipulation. Further, we find that SOX has altered the way Canadian domestic firms manipulate stock option grants.
This paper examines developments through the quarter century since the publication of Stokman, Ziegler and Scott's (1985) iconic ten-nation study of the structure of interlocking directorships.
The surprising decline of research in the area following the publication of is in part testimony to the rigour of the comparative methods used, raising the standard of evidence required for subsequent director interlock studies.