An Analysis of REIT CEO Stock-Based Compensation |
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| Authors: | Anita K Pennathur Otis W Gilley Roger M Shelor |
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| Institution: | Florida Atlantic University, Department of Finance, Davie, FL 33314 or .; Louisiana Tech University, Department of Economics and Finance, College of Business, Ruston, LA 71270 or .; Ohio University, Finance Department, Athens, OH 45701 or . |
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| Abstract: | Academic research findings on the determinants of executive compensation are mixed. Some researchers attribute this to the inclusion of stock-based compensation in the more recent studies. We study the determinants of stock-based compensation schemes in the REIT industry for the period 1997–2000. While previous research analyzes REIT CEOs' cash-based compensation, we concentrate on option compensation structures. Using the Tobit method, we study both the level of option awards and the mix of option awards to total compensation. We find that REIT CEOs receive larger option awards when they increase growth opportunities, funds from operation, earnings per share and when there is greater variability of returns. Thus, our results validate most of the theories on stock-based compensation. |
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