Publication: The effect of corporate governance on CEO luck: Evidence from the Institutional Shareholder Services (ISS)
Issued Date
2013-12-01
Resource Type
ISSN
15446123
Other identifier(s)
2-s2.0-84887893371
Rights
Mahidol University
Rights Holder(s)
SCOPUS
Bibliographic Citation
Finance Research Letters. Vol.10, No.4 (2013), 169-174
Suggested Citation
Pandej Chintrakarn, Pornsit Jiraporn, J. C. Kim The effect of corporate governance on CEO luck: Evidence from the Institutional Shareholder Services (ISS). Finance Research Letters. Vol.10, No.4 (2013), 169-174. doi:10.1016/j.frl.2013.06.001 Retrieved from: https://repository.li.mahidol.ac.th/handle/20.500.14594/31697
Research Projects
Organizational Units
Authors
Journal Issue
Thesis
Title
The effect of corporate governance on CEO luck: Evidence from the Institutional Shareholder Services (ISS)
Author(s)
Other Contributor(s)
Abstract
CEOs are "lucky" when they receive stock option grants on days when the stock price is the lowest in the month of the grant, implying opportunistic timing. Extending the work of Bebchuk et al. (2010), we explore the effect of overall corporate governance quality on CEO luck. Provided by the Institutional Shareholder Services (ISS), our comprehensive governance metrics are much broader than those used in prior studies, encompassing more diverse aspects of corporate governance, such as audit, state laws, boards, ownership, and director education. We show that an improvement in governance quality by one standard deviation diminishes CEO luck by 14.77-21.06%. The governance standards recommended by ISS appear to be effective in deterring the opportunistic timing of option grants. © 2013 Elsevier Inc.