Intellectual Capital and the Value of Executive Stock Options

• Main Authors: Lai Wen-Chi, 賴玟琪
• Other Authors: Lin Yimien
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/82788361559989894658

碩士 === 國立中興大學 === 會計學研究所 === 93 === I examine the information content of executive stock options when the intellectual capital is taken into consideration and compare the value of stock options taking account of the true stock price with two kinds of estimated stock prices (one is estimated by book values and earnings and the other is estimated by book values, earnings, and intellectual capital.). Since the effect of eliminating the agency problems by stock-based compensation is based on the strength of the incentives, I also investigate the determinants for the value of stock options. Moreover, according to the reasons for setting up stock-based compensation, I also study the information content of stock options on firm’s future growth value after considering the value of intellectual capital. The main results show that there is significant positive relation between executives’ ability of risk-taking, firm’s growth opportunities, executive percentage of stock holdings, and the value of executive stock options. I also document a significantly negative relation between executives’ tenure, institutional percentage of stock holdings, and the value of executive stock options. Moreover, the relation between the determinants of incentive compensation and the value of executive stock options is stronger when the value of executive stock option is taking account of intellectual capital. Additionally, my results shed light on the relation between the value of executive stock options and firm’s future growth value. Consistent with the notion that the compensation policy is used as a pre-commitment device to minimize the agency costs, I further provide evidence on the significant positive relation between the value of executive stock option and the firm’s future growth value. The relation mentioned above is particularly prominent when the valuation of executive stock options includes intellectual capital.