The incentives of Australian companies to utilize executive stock option plans

Crease, Simon A. (1998). The incentives of Australian companies to utilize executive stock option plans Honours Thesis, Dept. of Commerce, The University of Queensland.

       
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Author Crease, Simon A.
Thesis Title The incentives of Australian companies to utilize executive stock option plans
School, Centre or Institute Dept. of Commerce
Institution The University of Queensland
Publication date 1998
Thesis type Honours Thesis
Total pages 82
Language eng
Subjects 14 Economics
Formatted abstract This objective of this thesis is to investigate the firm specific characteristics which provide ex ante incentives to Australian companies to utilize executive stock option plans. Such information is useful in explaining the cross-sectional variation in managerial remuneration contracts. An efficient contract minimizes transaction costs. Managerial labour contracts will maximize firm value if they align the incentives of the manager with those of the shareholders to achieve a reduction in agency costs. In particular, options issued to executives serve to overcome the horizon, over-retention and managerial risk aversion problems. This study collects publicly disclosed information from a large sample of Australian firms. The results provide evidence that the level of remuneration of the Chief Executive Officer, the investment opportunity set of the firm and the degree of international diversification of the firm are significant factors which go toward determining the incentives to include stock options as a component in the managerial remuneration package. However, no significant direct relationship is found between firm leverage and the utilization of executive stock options.

 
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Created: Sat, 06 Nov 2010, 11:44:34 EST by Ning Jing on behalf of The University of Queensland Library