search query: @indexterm management contracts / total: 2
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| Author: | Blacconiere, W.G. Johnson, M.F. Lewis, M.F. |
| Title: | The role of tax regulation and compensation contracts in the decision to voluntarily expense employee stock options |
| Journal: | Journal of Accounting & Economics
2008 : SEP, VOL. 46:1, p. 101-111 |
| Index terms: | management contracts taxation stock options shareholders compensation |
| Language: | eng |
| Abstract: | This paper presents that firms with executive bonuses qualifying for deduction under Internal Revenue Code Section 162(m) were less likely to expense stock option compensation (hereafter as: SOC) in 2002. Furthermore, the more likely it is that a qualified firm will incur re-contracting costs, the less likely it is that the firm will expense SOC. CEOs of qualified firms also expensing SOC receive smaller bonuses than CEOs of expensing firms that are not qualified under 162(m), and the lower 162(m) bonuses are not offset by higher SOC. 57 firms that expense SOC during 2002 and 57 industry-asset matched controls are examined, and results suggest that 162(m) tax incentives are an important determinant of the decision to expense SOC. |
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