Abstract
Using a sample of unscheduled stock options granted to CEOs of large Canadian firms, we find reliable evidence of option grants manipulation. 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.S. stock market. Further, we find that SOX has altered the way Canadian domestic firms manipulate stock option grants. 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.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
