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|Title:||Are stock option grants to directors of state-controlled chinese firms listed in Hong Kong genuine compensation?||Authors:||Guan, Yuyan
|Keywords:||DRNTU::Business::Accounting||Issue Date:||2013||Source:||Chen, Z., Guan, Y., & Ke, B. (2013). Are stock option grants to directors of state-controlled chinese firms listed in Hong Kong genuine compensation? The accounting review, 88(5), 1547-1574.||Series/Report no.:||The accounting review||Abstract:||We examine the determinants and consequences of stock option compensation to directors of state-controlled Chinese firms that are incorporated outside China and listed in Hong Kong, referred to as state-controlled Red Chip firms, over the period 1990-2005. We find that state-controlled Red Chip firms granted directors a significant number of stock options in response to the demand of foreign investors. However, state-controlled Red Chip firms forced the directors to forfeit a significant percentage of their vested in-the-money stock options due to a conflict between the high-powered stock option compensation and state-controlled Red Chip firms’ unique managerial labor market. We find little evidence that directors’ stock option compensation changed the behavior of state-controlled Red Chip firms. Overall, our results are consistent with the media’s allegation that the stock options granted to directors of many, if not all, state-controlled Red Chip firms are not genuine compensation.||URI:||https://hdl.handle.net/10356/100562
|ISSN:||0001-4826||DOI:||10.2308/accr-50504||Rights:||© 2013 American Accounting Association.||Fulltext Permission:||none||Fulltext Availability:||No Fulltext|
|Appears in Collections:||NBS Journal Articles|
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