CEOs sit on good news till it’s time to sell stock, study finds - Capitol Report - MarketWatch: "Chief executives strategically time the release of good news to coincide with months in which their equity vests, according to a new study.
The study, first reported by the Financial Times, found that CEOs apportion 5% more “discretionary news” in vesting month than in prior months.
The study by the London Business School’s Alex Edmans and Moqi Xu, the National University of Singapore’s Luis Goncavles-Pinto and Insead’s Yanbo Wang looked at company news releases and the subsequent media reports for tone. The disclosure of one discretionary news item in a vesting month generates a significant 16-day abnormal return of 28 basis points, they found.
Since the average CEO equity sale is over 6% of average daily trading volume, chief executives also benefit from the increased liquidity caused by an information release.
– Steve Goldstein"
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