Eliezer Fich, Ph.D., associate professor of finance at LeBow College of Business, was quoted in a Wall Street Journal article about the practice of awarding stock options to top executives while engaging in negotiations to be acquired.
“It’s very selfish behavior by these CEOs,” argues Fich, co-author of a research paper on the topic with Jie Cai, an assistant professor of finance at LeBow College, and Anh L. Tran. “They want to get the last nickel from the company, regardless of what’s in the best interests of shareholders.”
Their paper, which has been presented at academic conferences but not yet published, examined 110 deals between 1999 and 2006 in which target company CEOs were given unscheduled stock-option grants while takeover discussions had started but hadn’t yet been made public.