CEO and CFO Stock Options and Trading Activity Around Bank Loans
研究发现CEO和CFO会在银行借款协议公告前后策略性地安排期权授予日期和股票交易，先买入后卖出以获利，且CFO的此类机会主义行为是首次被明确证实。
ABSTRACT Research Question/Issue When firms make major bank loan agreements, stock prices, on average, react positively. This creates an incentive for executives to time both stock trading and the dating of option grants relative to the announcement of such agreements. Research Findings/Insights We find evidence that both CEOs and CFOs time bank loan agreement announcements after option grant dates, significantly increase the stock purchased prior to (and the stock sold after) the announcement. Our results support management strategically timing of the bank loan agreement announcement as opposed to influencing the compensation committee to time the option grant date for the benefit of management. While these findings complement prior research on the proven CEOs opportunistic behavior around corporate events, they offer a new conspicuous evidence of CFOs opportunistic behavior. Theoretical/Academic Implications This study contributes to the literature on opportunistic managerial behavior around corporate events by examining the stock option grants, exercises, and stock trades surrounding a major bank loan agreement and the relational interplay between the CEOs and CFOs. While concurrently testing and confirming the expected CEOs opportunistic behavior, the study augments the literature with strong evidence of CFOs opportunistic behavior coinciding with the announcement of bank loan agreements. Practitioner/Policy Implications Our results are of value to the board of directors when formulating executive pay and in support of the heightened regulatory requirements on the executive compensation disclosure. Overall, our evidence calls out the Security and Exchange Commission laxity in monitoring loan‐related disclosures and lends support to the SEC (2006) amended disclosure rules on CFO compensation. Complete and timely disclosures are useful to investors and analysts to assess managerial expectations and mitigate aggressive timing of corporate events.