How Do Managers Behave in Stock Option Plans? Clinical Evidence from Exercise and Survey Data
Year: 2008
Type: preprint
Study design: Observational Study
Abstract: We use unique data to empirically analyse the behavior of senior managers in a distinct stock option plan. Combining individual-level exercise data with very detailed questionnaire data, we study how these managers exercise their stock options. Moreover, we investigate which rational and behavioral factors explain differences in the observed exercise behavior. We find that individuals exercise options very early and in a few large transactions. Risk aversion and holdings of company stock cannot explain the exercise behavior in our data. We provide interesting and new results that suggest that exercise decisions depend on the psychological factors miscalibration and mental accounting.
Source: SSRN Electronic Journal
Authors: Martin Weber, Zacharias Sautner
Language: English
Subfield: General Decision Sciences
Field: Decision Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3122364147