Employee Stock Options, EPS Dilution, and Stock Repurchases

By Daniel A. Bens, Venky Nagar, Douglas J. Skinner, M. Wong. 2003

423 citations recorded by the source corpus.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/db317220d2d1689549e053cfb08e44ef46081c75

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Citations in the corpus

Understanding Earnings Quality: A Review of the Proxies, Their Determinants and Their Consequences (2010, background): “Firms also make real decisions to meet analyst forecasts such as repurchasing stock (Hribar et al., 2006), selling fixed assets or marketable securities (Herrmann et al., 2003), or repurchasing shares (Bens et al., 2003).”
Beating Earnings Benchmarks and the Cost of Debt (2008, background): “10 I use earnings per share instead of earnings to capture firms that beat earnings benchmarks by manipulating shares outstanding (Bens et al. 2003; Myers and Skinner 2002).”
The Real Effects of Share Repurchases (2016, positive): “, 1995; Brockman and Chung, 2001; Peyer and Vermaelen, 2007), when they lack future growth opportunities (Grullon and Michaely, 2004), to signal strong future performance (Lie, 2005), to boost employee incentives (Babenko, 2009), to mitigate the dilutive effect of stock option exercises (Kahle, 2002”
Incentives for Tax Planning and Avoidance: Evidence from the Field (2014, background): “…in the face of tax rate changes by testing the shifting of financial accounting income, and Guenther (1994) who examines Graham et al. (2005) and Bens et al. (2003) both provide evidence consistent with managers being willing to spend cash to increase accounting earnings and earnings per share.”
Are Executive Stock Options Associated with Future Earnings (2003, positive): “For example, it could indicate managers diverting resources away from value-enhancing productive activities to manage short-term investor perceptions (Bens et al. 2002; Bens, Nagar, Skinner and Wong 2002).12”
Payout Policy in the 21st Century (2003, positive): “Chief Financial Officers (CFOs) are also very conscious of how repurchases affect earnings per share, consistent with Bens et al. (2003).”
Sustained Earnings and Revenue Growth, Earnings Quality, and Earnings Response Coefficients (2005, positive): “We follow prior literature (e.g., Jones, 1991; Bartov, 1993; Dechow et al., 1995; Bens et al., 2003) to identify several specific approaches that are often related to earnings management.”
R&D Expenditure and Earnings Targets (2009, positive): “, 2007), reclassification of core expenses as special items (McVay, 2006) and share repurchases (Bens et al., 2003; Hribar et al., 2004).”
Audit Quality and the Trade-Off between Accretive Stock Repurchases and Accrual-Based Earnings Management (2012, methodology): “95, p-value , 0.0001). We use actual repurchases when available, but this additional test reduces concerns over estimation error when actual repurchases are unavailable. Our results remain robust when using the estimation method used by Hribar et al. (2006). 7 We estimate each firm’s borrowing rate ”
Why do Firms Repurchase Stock (2012, positive): “Hribar, Jenkins, and Johnson (2006) extend the findings by Bens et al. in several ways. First, Hribar et al. use a sample of firms that is not limited to firms that face options-related EPS dilution. This allows for an investigation into a broader set of questions about the use of stock repurchases ”