Stock option use by Australian IPOs

Ren, S; Wright, A; Wyatt, A

Stock option use by Australian IPOs

Ren, S Wright, A

Wyatt, A

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Publication Type:: Journal Article
Citation:: Journal of Contemporary Accounting and Economics, 2012, 8 (1), pp. 1 - 22
Issue Date:: 2012-06-01

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Field	Value	Language
dc.contributor.author	Ren, S	en_US
dc.contributor.author	Wright, A https://orcid.org/0000-0002-6132-571X	en_US
dc.contributor.author	Wyatt, A	en_US
dc.date.issued	2012-06-01	en_US
dc.identifier.citation	Journal of Contemporary Accounting and Economics, 2012, 8 (1), pp. 1 - 22	en_US
dc.identifier.issn	1815-5669	en_US
dc.identifier.uri	http://hdl.handle.net/10453/18853
dc.description.abstract	This paper examines the use of stock options by Australian IPOs. Stock options in this setting exhibit heterogeneity of 'in the moneyness' attributes. We can therefore identify . incentive 'out of the money' options and . reward 'at or in the money' options and study their usage. The setting also features options granted to . employees (CEO, executives, non-executive directors, and managers) and . external parties (e.g., underwriters, lenders, seed capitalists, and promoters). We examine the motives for granting stock options with different 'in the moneyness' attributes to employees and external parties, as well as the performance outcomes. Our results suggest 'in the moneyness' attributes of options vary according to uncertainties about growth options, general operating risks, and/or agency risks relating to the use of IPO proceeds; however, these relations do not translate into robust links from the option grants to future performance. © 2012 Elsevier Ltd.	en_US
dc.relation.ispartof	Journal of Contemporary Accounting and Economics	en_US
dc.relation.isbasedon	10.1016/j.jcae.2012.03.003	en_US
dc.title	Stock option use by Australian IPOs	en_US
dc.type	Journal Article
utslib.citation.volume	1	en_US
utslib.citation.volume	8	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Accounting Discipline
pubs.organisational-group	/University of Technology Sydney/Strength - CCG - Centre for Corporate Governance
utslib.copyright.status	closed_access
pubs.issue	1	en_US
pubs.publication-status	Published	en_US
pubs.volume	8	en_US

Abstract:

This paper examines the use of stock options by Australian IPOs. Stock options in this setting exhibit heterogeneity of 'in the moneyness' attributes. We can therefore identify . incentive 'out of the money' options and . reward 'at or in the money' options and study their usage. The setting also features options granted to . employees (CEO, executives, non-executive directors, and managers) and . external parties (e.g., underwriters, lenders, seed capitalists, and promoters). We examine the motives for granting stock options with different 'in the moneyness' attributes to employees and external parties, as well as the performance outcomes. Our results suggest 'in the moneyness' attributes of options vary according to uncertainties about growth options, general operating risks, and/or agency risks relating to the use of IPO proceeds; however, these relations do not translate into robust links from the option grants to future performance. © 2012 Elsevier Ltd.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/18853