The Disclosure of Directors Share Option Information in UK Companies

Conyon, Martin and Mallin, C and Sadler, G (2002) The Disclosure of Directors Share Option Information in UK Companies. Applied Financial Economics, 12 (2). pp. 95-103. ISSN 0960-3107

Abstract

This paper considers the empirical determinants of the quality of information disclosed about directors' share options in a sample of large companies in 1994 and 1995. Policy recommendations, consolidated in the recommendations of the Greenbury report, argue for full and complete disclosure of director option information. In this paper two modest contributions to the UK empirical literature are made. First, the current degree of option information disclosure in the FTSE 350 companies is documented. Second, option information disclosure as a function of variables that are thought to influence corporate costs of disclosure is modelled. The results have implications for corporate governance. Specifically, support is offered for the monitoring function of nonexecutive directors. In addition, nondisclosure is found to be related to variables which proxy proprietary costs of revealing information (such as company size).