Option backdating board interlocks
READ MORE The following post comes to us from Cesare Fracassi of the Department of Finance at the University of Texas at Austin and Geoffrey Tate of the Department of Finance at the University of California, Los Angeles.
, we use panel data on S&P 1500 companies to identify external network connections between directors and CEOs.
We observe network connections stemming from shared external board seats, prior employment in other firms, education, or charitable and leisure activities.
We test whether these ties affect firm policies and performance.
We also find that a firm is more likely to begin to backdate option awards if directors concurrently receive a stock option grant.