Abstract
This study investigates the impact of stock option plans, defined as share-based incentive contracts provided by companies to their employees, on the value relevance of accounting information. The purpose of this study is to analyse the extent to which the value relevance of accounting information is affected by the adoption of stock option plans. Using panel data, the empirical analysis shows that the value relevance of accounting information is affected by the adoption of stock option plans. They are seen by the market as a “cost” and not as an opportunity or an attempt to align different interests. In addition, the research results show that the market performance does not seem affected by the design of the stock option plans. However, the firm’s market performance appears to be more related to the structure of the stock option plans in companies with a higher market capitalization. Thus further research is needed to deeper investigate the impact of the design of the stock option plans and the effect of the endogenous characters
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.