Dergiler / Journal of Business Economics and Finance / 2014 / Cilt: 3 - Sayı: 2 #87483

The Impact Of CEO Stock Option Expensing As Per SFAS 123 (R) On Earnings Quality

The Impact Of CEO Stock Option Expensing As Per SFAS 123 (R) On Earnings Quality

Veronica PAZ, Syed ZAİDİ

Sayfa
153–170
DOI
—

Abstract

This paper examines the relationship between stock option expensing as per SFAS 123 (R) as a part of CEO compensation and earnings quality. We hypothesize the expensing of CEO stock options as per SFAS 123 (R) positively influences earnings quality. This study contributes to literature by further enhancing our knowledge of CEO compensation and the bonding effect of stock options awarded to CEOs. The ExecuComp database provides the sample for CEO compensation from 2000 to 2009. Estimating earnings quality using multiple regressions, we find empirical support for our hypotheses.