Information distribution within firms: Evidence from stock option exercises

Steven Huddart, Mark Lang

Research output: Contribution to journalArticlepeer-review

67 Scopus citations

Abstract

We examine the stock option exercise decisions of over 50,000 employees at seven corporations to provide evidence on the distribution of price-relevant non-public information among employees. When option exercise (adjusted for other factors affecting exercise) is low, stock returns in the coming 6 months are 10% higher than when option exercise is high. The exercise decisions of relatively junior employees contain at least as much price-relevant information as the exercise decisions of more senior employees.

Original languageEnglish (US)
Pages (from-to)3-31
Number of pages29
JournalJournal of Accounting and Economics
Volume34
Issue number1-3
DOIs
StatePublished - Jan 1 2003

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

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