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Researchers study connection between CEO pay options and fraud

Friday, August 4, 2006

Dr. Matt Gilley
Dr. Matt Gilley

A website for one of the world's leading publications on business, politics and international affairs is spotlighting the findings of an Oklahoma State University researcher on the relationship between fraud and how CEOs are compensated.

Economist.com is reporting on research by OSU's Dr. Matt Gilley and his partners in Texas and Wisconsin, who found that giving chief executives stock options is not always the best idea.

Of 103 firms studied, the research found that chief executives who did not also chair the board of directors and whose board members did not hold stock options were least likely to be implicated in fraudulent reporting. The research also found that the older a chief executive is, the less likely they are to engage in dishonest behavior.

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