Strategic news releases in equity vesting months
Edmans, A., Goncalves-Pinto, L., Groen-Xu, M. & Wang, Y.
(2018).
Strategic news releases in equity vesting months.
Review of Financial Studies,
31(11), 4099 - 4141.
https://doi.org/10.1093/rfs/hhy070
We find that CEOs release 20% more discretionary news items in months in which they are expected to sell equity, predicted using scheduled vesting months. These vesting months are determined by equity grants made several years prior, and thus unlikely driven by the current information environment. The increase arises for positive news, but not neutral or negative news, nor non-discretionary news. News releases fall in the month before and month after the vesting month. News in vesting months generates a temporary increase in stock prices and market liquidity, which the CEO exploits by cashing out shortly afterwards.
| Item Type | Article |
|---|---|
| Copyright holders | © 2018 Society for Financial Studies |
| Departments | LSE > Academic Departments > Finance |
| DOI | 10.1093/rfs/hhy070 |
| Date Deposited | 12 Jun 2018 |
| Acceptance Date | 20 Mar 2018 |
| URI | https://researchonline.lse.ac.uk/id/eprint/88301 |
Explore Further
- G14 - Information and Market Efficiency; Event Studies
- G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
- http://www.lse.ac.uk/finance/people/faculty/Groen-Xu.aspx (Author)
- https://www.scopus.com/pages/publications/85047151271 (Scopus publication)
- https://academic.oup.com/rfs (Official URL)