... with over optimistic shareholders. Findings – The results suggest that boards of directors should decrease option grants to CEOs when equity is likely to be irrationally overvalued at the date when the CEO's options vest. Research limitations/implications – The implications of the model...

...Spencer Case; Janet D. Payne Purpose In this paper, the authors aim to test the assertion that options act as a substitute for short sales by allowing investors an alternative way to act on bearish sentiment. An empirical test of this assertion requires a researcher to observe both types of firm...