Insider Trading Around ESOP Announcements: Wealth Effect vs. Control Effect
Following the enactment of ERISA (Employee Retirement Income Security Act) in 1974, employee stock ownership plans (ESOPs) have become a popular form of employee compensation among U.S. companies. The introduction of an ESOP has important implications for management interest that should encourage in...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Universiti Utara Malaysia Press
2003
|
| Subjects: | |
| Online Access: | https://repo.uum.edu.my/id/eprint/25125/1/IJBF%201%202%202003%2089%20110.pdf |
| _version_ | 1825805227944574976 |
|---|---|
| author | Iqbal, Zahid Pettengill, Glenn N. Shetty, Shekar |
| author_facet | Iqbal, Zahid Pettengill, Glenn N. Shetty, Shekar |
| author_sort | Iqbal, Zahid |
| collection | UUM |
| description | Following the enactment of ERISA (Employee Retirement Income Security Act) in 1974, employee stock ownership plans (ESOPs) have become a popular form of employee compensation among U.S. companies. The introduction of an ESOP has important implications for management interest that should encourage insiders buying activity. This paper documents that unusual insider buying activity has indeed resulted from the introduction of an ESOP. Further we examine two competing explanations, the wealth hypothesis and the control hypothesis, for the increase in insiders buying activity. We conclude that insiders buying activity is primarily motivated by control considerations. |
| first_indexed | 2024-07-04T06:28:51Z |
| format | Article |
| id | uum-25125 |
| institution | Universiti Utara Malaysia |
| language | English |
| last_indexed | 2024-07-04T06:28:51Z |
| publishDate | 2003 |
| publisher | Universiti Utara Malaysia Press |
| record_format | eprints |
| spelling | uum-251252018-11-11T00:46:45Z https://repo.uum.edu.my/id/eprint/25125/ Insider Trading Around ESOP Announcements: Wealth Effect vs. Control Effect Iqbal, Zahid Pettengill, Glenn N. Shetty, Shekar HG Finance Following the enactment of ERISA (Employee Retirement Income Security Act) in 1974, employee stock ownership plans (ESOPs) have become a popular form of employee compensation among U.S. companies. The introduction of an ESOP has important implications for management interest that should encourage insiders buying activity. This paper documents that unusual insider buying activity has indeed resulted from the introduction of an ESOP. Further we examine two competing explanations, the wealth hypothesis and the control hypothesis, for the increase in insiders buying activity. We conclude that insiders buying activity is primarily motivated by control considerations. Universiti Utara Malaysia Press 2003 Article PeerReviewed application/pdf en https://repo.uum.edu.my/id/eprint/25125/1/IJBF%201%202%202003%2089%20110.pdf Iqbal, Zahid and Pettengill, Glenn N. and Shetty, Shekar (2003) Insider Trading Around ESOP Announcements: Wealth Effect vs. Control Effect. International Journal of Banking and Finance (IIJBF), 1 (2). pp. 89-110. ISSN 1675-7227 http://ijbf.uum.edu.my/index.php/previous-issues/132-the-international-journal-of-banking-and-finance-ijbf-vol-1-no-2-june-december-2003 |
| spellingShingle | HG Finance Iqbal, Zahid Pettengill, Glenn N. Shetty, Shekar Insider Trading Around ESOP Announcements: Wealth Effect vs. Control Effect |
| title | Insider Trading Around ESOP Announcements: Wealth Effect vs. Control Effect |
| title_full | Insider Trading Around ESOP Announcements: Wealth Effect vs. Control Effect |
| title_fullStr | Insider Trading Around ESOP Announcements: Wealth Effect vs. Control Effect |
| title_full_unstemmed | Insider Trading Around ESOP Announcements: Wealth Effect vs. Control Effect |
| title_short | Insider Trading Around ESOP Announcements: Wealth Effect vs. Control Effect |
| title_sort | insider trading around esop announcements wealth effect vs control effect |
| topic | HG Finance |
| url | https://repo.uum.edu.my/id/eprint/25125/1/IJBF%201%202%202003%2089%20110.pdf |
| work_keys_str_mv | AT iqbalzahid insidertradingaroundesopannouncementswealtheffectvscontroleffect AT pettengillglennn insidertradingaroundesopannouncementswealtheffectvscontroleffect AT shettyshekar insidertradingaroundesopannouncementswealtheffectvscontroleffect |