THE EFFECTS OF ACCOUNTING TREATMENT AND FINANCIAL CRISIS ON THE STOCK OPTION PLANS OF ITALIAN COMPANIES

Many studies state that favourable accounting treatment has been one of the main reasons firms issue employee stock options. However, stock options have recently received growing criticism with a possible effect on incentive effectiveness and outrage costs. The main purpose of this study is to explo...

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Bibliographic Details
Published in:Economic and business review for Central and South-Eastern Europe 2014-01, Vol.16 (1), p.77-95
Main Authors: Avallone, Francesco, Quagli, Alberto, Ramassa, Paola
Format: Article
Language:English
Subjects:
Accounting
Consolidated financial statements
Cost control
Costs
Economic crisis
Executive compensation
financial crisis
Hypotheses
IFRS 2
IFRS adoption
International finance
International Financial Reporting Standards
Italy
Options on stocks
Personnel policies
stock option
Stock options
Stockholders
Studies
Tax benefits
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Summary:Many studies state that favourable accounting treatment has been one of the main reasons firms issue employee stock options. However, stock options have recently received growing criticism with a possible effect on incentive effectiveness and outrage costs. The main purpose of this study is to explore the impacts of IFRS 2 and the recent financial crisis on stock option compensation. Empirical evidence suggests that (i) IFRS 2 did not have a significant effect on the granting of stock options, and (ii) the issue of stock options is less likely to occur during a financial crisis.
ISSN:1580-0466
2335-4216
DOI:10.15458/2335-4216.1181