Strategic News Releases in Equity Vesting Months

A-Tier
Journal: The Review of Financial Studies
Year: 2018
Volume: 31
Issue: 11
Pages: 4099-4141

Authors (4)

Score contribution per author:

1.005 = (α=2.01 / 4 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

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 to be driven by the current information environment. The increase arises for positive news, but not neutral or negative news, nor nondiscretionary 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.Received August 29, 2014; editorial decision March 20, 2018 by Editor Laura Starks. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Technical Details

RePEc Handle
repec:oup:rfinst:v:31:y:2018:i:11:p:4099-4141.
Journal Field
Finance
Author Count
4
Added to Database
2026-01-25