The role of equity compensation in reducing inefficient investment in labor
| Autor: | Janto Haman, Michaela Rankin, Mohammed Aminu Sualihu |
|---|---|
| Rok vydání: | 2021 |
| Předmět: |
040101 forestry
Economics and Econometrics 050208 finance Executive compensation Strategy and Management 05 social sciences Equity (finance) Stock options 04 agricultural and veterinary sciences Restricted stock Monetary economics Empire-building Investment decisions Under investment 0502 economics and business 0401 agriculture forestry and fisheries Business Business and International Management Finance |
| Zdroj: | Journal of Corporate Finance. 66:101788 |
| ISSN: | 0929-1199 |
| DOI: | 10.1016/j.jcorpfin.2020.101788 |
| Popis: | This thesis examines whether equity compensation incentivises executives to make efficient labour investment decisions. Specifically, it examines whether the components of equity compensation — stock options and restricted stock — affect over- and under-investment in labour. Based on a sample of 12118 firm-year observations from 1992 to 2014, it is found that stock options exacerbate over-investment and mitigate under-investment in labour. In contrast, restricted stock is found to mitigate both over- and under-investment in labour. Overall, the findings demonstrate that stock options and restricted stock matter in executives’ labour investment decisions. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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