Easy money? Managerial power and the option backdating game revisited

摘要: Abstract This paper presents a model of firm that backdates executive stock option grants in order to maximize actual compensation for given level reported compensation. The is used estimate the magnitude difference between and values grants. Although Sarbanes–Oxley Act has reduced likelihood very large differentials, it had relatively minor impact on average differential. Misreporting greater magnitude, average, when share price more volatile, options vest earlier or have shorter lifetimes, there longer window which grant options. We analyze than 36,000 2003 2019 find recipients gain from strategic backdating, likely be less monitoring independent directors, firms are exhibit behavior consistent with backdating.