Recent research has suggested that stock options and equity ownership have different motivational implications for executive risk taking. We examined investors' reactions to the differing incentive properties of stock options and equity ownership in the context of firms undertaking initial public offerings (IPOs). We found that stock options and equity ownership interacted to influence the premiums that investors applied to IPO firms. We suggest that the effectiveness of CEO stock options may depend on the level of CEO equity.
ASJC Scopus subject areas
- Business and International Management
- Business, Management and Accounting(all)
- Strategy and Management
- Management of Technology and Innovation