Document Type
Article
Publication Date
Spring 2018
Publication Title
Financial Management
Abstract
We analyze the relation between the delta and vega of a chief executive officer’s (CEO) compensation and the propensity of the firm to engage in a split. Controlling for other well-known factors, we find that CEOs with compensation that has higher levels of delta are more likely to split their shares. Furthermore, the choice of split factor is inversely related to delta. Our results are economically significant: for the average (median) firm in our sample, a stock split results in a CEO wealth gain of $4.9 million ($84,000).
Recommended Citation
DeVos, Erik; Elliott, William B.; and Warr, Richard S., "The Propensity to Split and CEO Compensation" (2018). 2018 Faculty Bibliography. 13.
https://collected.jcu.edu/fac_bib_2018/13
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-Share Alike 4.0 International License.