CEOs make money from negative information released prior to stock option grants

(Lehigh University) Stock options are often used to align the interests of stakeholders and CEOs, as both benefit when share price rises. New research shows, however, that companies release more negative news during the period immediately before stock options are granted to their CEOs, which financially benefits the CEOs. CEOs, who control the release and tenor of the information, see higher future gains when options are granted while the share price is lower.
Source: EurekAlert! - Social and Behavioral Science - Category: International Medicine & Public Health Source Type: news