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Executive stock options and corporate report disclosures: managerial power and outrage costs perspectives

Kelly, Elisha J. and Mroczkowski, Nicholas 2011, Executive stock options and corporate report disclosures: managerial power and outrage costs perspectives, International journal of economics and accounting, vol. 2, no. 2, pp. 145-172, doi: 10.1504/IJEA.2011.040112.


Title Executive stock options and corporate report disclosures: managerial power and outrage costs perspectives
Author(s) Kelly, Elisha J.
Mroczkowski, Nicholas
Journal name International journal of economics and accounting
Volume number 2
Issue number 2
Start page 145
End page 172
Total pages 28
Publisher Inderscience
Place of publication Olney, Eng.
Publication date 2011
ISSN 2041-868X
2041-8698
Summary This study examines annual report disclosures of executive stock option(s) (ESOs) values by Australian listed companies for periods ending 2002 and 2003. This period was a 'one-time' window of opportunity in which the Australian regulations for disclosing option values in financial statements were unclear, thus allowing preparers some latitude in the application of pricing regimes for the purpose of disclosure. The study further investigates the relation between reported option values and factors known to influence option valuations. Given the growing public concerns regarding director's excessive compensation schemes and the governance of enterprises generally, this study provides evidence that directors have incentives to underreport the value of executive options. The evidence suggests that not only do directors have the power to award themselves excessive compensation, but also the mechanisms to camouflage excessive remuneration to avoid stakeholder dissent. This is the first known Australian study that examines option valuations in the context of managerial power and outrage cost theories.
Language eng
DOI 10.1504/IJEA.2011.040112
Field of Research 1402 Applied Economics
1501 Accounting, Auditing And Accountability
1502 Banking, Finance And Investment
Socio Economic Objective 0 Not Applicable
HERDC Research category C1.1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2011, Inderscience Enterprises Ltd.
Persistent URL http://hdl.handle.net/10536/DRO/DU:30091016

Document type: Journal Article
Collection: Department of Accounting
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