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Given that the practice was not publicly disclosed, it is unlikely that it originated independently in each firm.
Our analysis provides guidance to both academics and practitioners about how differences in exercise behavior and model choice affect measures of ESO values and incentives, and underscores the importance of gaining a thorough understanding of the underlying economic forces that affect the behavior of ESO holders Our findings also suggest that the documented asymmetry in the relationship between CEO pay and luck is explained by the firms desire to adjust pay for retention purposes and is not the result of rent-seeking behavior on the part of the CEO.Overlapping board memberships may have facilitated the transmission of the practice from one company to another through the small and exclusive club of corporate directors.This suggestion is also contrary to the current wisdom that the practice was management driven – at least that is the inference from the two cases the SEC and DOJ have filed.A new study by finance professors suggests that the backdating of stock options may be a much more wide-spread practice than once thought.Initially, many believed that stock option backdating might have been concentrated in the high tech area.
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A firm is also more likely to begin to backdate, the greater the stock and option holdings of the CEO and when the CEO is younger.